Laws, Regulations & Annotations

Business Taxes Law Guide – Revision 2018

Sales and Use Tax Annotations

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See also Installing, Repairing and Reconditioning in General.

355.0020 Bindery Fabrication. Taxpayer performs bindery work that consists of gathering customer furnished printed sheets, arranging them in sequence, stapling and folding the printed sheets, enclosing them in customer furnished envelopes, and sealing, sorting and mailing the printed material.

The taxpayer's organizing of the material into sequence and stapling the pages together constitutes taxable fabrication labor and the charge for this activity is subject to tax. It is immaterial that the staples may be furnished by the customer. 11/24/53. (Am. 2005–2).

355.0030 Jewelry Repairman—Consumers of Precious Stones. Jewelry repairmen are consumers of precious stones (diamonds, rubies, sapphires, pearls, etc.,) used in their repair operations if the stones are of insignificant value and essentially fungible in nature. These stones would be considered jewelry repair parts of which the repairmen is the consumer under Regulation 1553(e). 4/5/89.

355.0040 Out-of-State Bookbinding. The regulation provides that bookbinders are consumers of the materials used in rebinding used books for a lump-sum charge. If the bookbinding is performed outside the state, the use tax does not apply to charges to California customers. 7/9/79.

355.0060 Unclaimed Watches. A watch repairman's sale of repaired but unclaimed watches is subject to the sales tax. He is entitled to a "tax-paid purchases resold" deduction for the tax-paid price of the repair materials incorporated into the watches sold. 7/29/64.

355.0071 Watch and Jewelry Repairmen. Regulation 1553(e) sets forth conditions under which watch and jewelry repairmen are consumers. This section applies whether the repairs are performed for the owners of the article or for other watch and jewelry retailers. 4/5/89. (Am. 2000–1).

355.0075 Watch Repair—Furnishing of Bezels. A repairman of watch cases for jewelers, located both inside and outside of California, makes bezels that are sold to the jewelers at wholesale prices. Sales tax applies as follows:

(1) The watch repairman replaces the bezel. Tax applies to the sale of the bezel to the repairman or the cost of the part(s) or raw materials used to make the bezel. This is true whether or not the jeweler or the watch owner is located inside or outside the state. No tax applies to the repairman's charge for the repairs nor to the charge that the jeweler makes to his customer.

(2) The watch repairman sells bezels to other repairman in California. Sales tax applies to the amount charged when a bezel is sold at retail to a person in California.

(3) The watch repairman sells bezels to other repairman located outside California. No tax applies when the bezel is sold to a person outside California when the contract of sale requires delivery of the bezel outside the state and it is actually shipped outside California. 6/21/90.

355.0080 Watch Repairmen. Watch repair parts furnished pursuant to a warranty which was a provision of the original contract of sale of the watch are not self-consumed by the watch repairer, but are regarded as having been sold with the watch. Accordingly, no tax applies with respect to the use of the parts by the watch repairer. 11/20/64.