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
(3) Matrices, Molds, Models
440.0340 Molds and Dies—Title. In the instance of molds and dies used in the manufacture of oil seals it has been ruled that even though a purchase order and invoice are exchanged, which typically form part of the sales contract, no sale has taken place if the tooling only is used in the production of the product and not turned over to the customer at the end of the run. In this case the invoice is only a pricing arrangement and not evidence of sale. Thus, the only sale is the sale of the oil seals. If that sale is in interstate commerce, the manufacturer's charge is exempt from sales tax. If the title provision for the tooling appears on the purchase order or invoice, then the manufacturer sells the tooling. If title passes before the manufacturer's use, sales tax applies to the sale. If title passes after the manufacturer's use, the manufacturer may not purchase the tooling for resale, but the sale by the manufacturer will be an exempt sale in interstate commerce if it meets the specific requirements of the exemption. 5/27/64; 11/21/89.