Laws, Regulations & Annotations

Business Taxes Law Guide – Revision 2014
 

Sales and Use Tax Annotations


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P

440.0000 PROPERTY USED IN MANUFACTURING—Regulation 1525

Annotation 440.1852

(b) PROPERTY BECOMING COMPONENT PART OF FINISHED PRODUCT

(1) In General

440.1852 Carrier Gases/Dopants. Manufacturers of silicon wafers may purchase a mixture of carrier gas and dopants for resale. The carrier gases facilitate transportation of the toxic dopant and to control the amount of dopant diffused into the water. It is not incorporated into the finished product. It is appropriate to allow the manufacturer to purchase the combined product for resale. The situation is analagous to paint which includes thinner. A manufacturer may purchase a paint with thinner for resale, but separate purchases of thinner only are subject to tax.

In this case, the mixture serves a dual purpose. The Board has long held that property is purchased for incorporation, even though a portion may be used in the manufacturing process, if the use in the manufacturing process is for the purpose of incorporating the property into the end product sold. 2/26/80.