Unless otherwise indicated, Section references are to Title 2 of the Texas Tax Code, and Rule references are to sections of Title 34, Texas Administrative Code. Notice has been taken of all Comptroller's records pertinent to Petitioner or the issues raised in this case. Petitioner contends that tax should not have been assessed on certain purchases because it should be considered a manufacturer. Petitioner sells women's clothing at wholesale. Petitioner's timely filed request for redetermination resulted in this proceeding.
Tax is assessed on Petitioner's purchases of wrapping and packaging supplies.
The cutting, fusing, sewing, pressing, and finishing portions of the process are contracted out to independent companies. Petitioner has not specifically identified any items in the audit that it believes comes within the claimed exemption. Petitioner contends that tax should not have been assessed on the purchases of the wrapping and packaging supplies because it should be considered a manufacturer since it controls all the manufacturing process from start to finish. According to the parties, the central issue in this case is whether Petitioner is a manufacturer or otherwise entitled to claim a manufacturing exemption. To make, build, create, produce, or assemble components of tangible personal property, or to make tangible personal property work in a new or different manner.