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 440.3437

(b) PROPERTY BECOMING COMPONENT PART OF FINISHED PRODUCT

(4) Miscellaneous Specific Components

440.3437 Sodium Hydroxide. In the sulfonation process, sodium hydroxide is added to sulfonic acid to produce sodium sulfonate. The sodium portion of the sodium hydroxide becomes the sodium portion of the sodium sulfonate. Thus, sodium hydroxide becomes an ingredient of sodium sulfonate, the manufactured item to be sold. The use of the sodium hydroxide as a pH neutralizer is incidental to the primary purpose of incorporating it into the sulfonic acid to create sodium sulfonate. Under these circumstances, tax does not apply to the sale of this product to a manufacturer of sodium sulfonate who in turn will resell the manufactured sodium sulfonate. 12/11/96.