Laws, Regulations & Annotations
Business Taxes Law Guide – Revision 2013
Sales and Use Tax Annotations
440.0000 PROPERTY USED IN MANUFACTURING—Regulation 1525
(a) MANUFACTURING AIDS
(1) In General
440.0010 Application of Tax. If a taxpayer purchases manufacturing aids in a transaction that is subject to sales tax, that taxpayer's subsequent use of the aids to make a finished product is not subject to use tax. There are, however, circumstances in which both the sale and the use of the aids can be subject to tax. If the property is purchased under a resale certificate and the taxpayer makes any use of it other than retention, demonstration or display while holding it for sale in the regular course of business, that use is taxable to the taxpayer. If the taxpayer sells the same property at retail in California after using it, the sale will also be taxable. 3/1/90.