California Code of Regulations › Title 18 - Public Revenues › Division 2 - California Department of Tax and Fee Administration- Business Taxes (State Board of Equalization- Business Taxes, See Ch. 6 and 9.9) › Chapter 4 - Sales and Use Tax › Article 7 - Specific Kinds of Property and Exemptions Generally › Section 1589 - Containers and Labels

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a)
				  Definitions. The term "containers" as used herein means the articles in or on
				  which tangible personal property is placed for shipment and delivery such as
				  wrapping materials, bags, cans, twines, gummed tapes, barrels, boxes, bottles,
				  drums, carboys, cartons, sacks, pallets and materials from which such
				  containers are manufactured.
The term "returnable containers" as used herein means
					 containers of a kind customarily returned or resold by the buyers of the
					 contents for re-use by the packers, bottlers or sellers of the commodities
					 contained therein. A container, title to which is retained by the seller or for
					 which a deposit is taken by such seller, is a returnable container.
A container used for shipment or delivery of food for human
					 consumption is not customarily returned by the buyer when:
1. The container is sold together with the
				  contents;
2. No deposit is charged
				  on the container;
3. Title to the
				  container is not retained;
4. There
				  is no obligation to repurchase the container;
5. The container is of the type that is
				  fungible; and
6. The container is
				  repurchased without regard to whether it is the same container originally sold.
Example: A tomato paste processor purchased a new or used
					 container. The processor fills the container with tomato paste or other
					 processed food. The tomato paste, together with the container, is sold to a
					 spaghetti sauce manufacturer. No deposit is charged on the container, title to
					 the container is not retained, and there is no obligation to repurchase the
					 container. The container is of a type that is fungible. The spaghetti sauce
					 manufacturer sells the container to a warehouse or a food processor who in turn
					 sells containers that may or may not include the original container to a tomato
					 paste processor that may or may not be the original purchaser. This container
					 is not customarily returned by the buyer.
Examples of returnable containers are: registered dairy
					 products containers, steel drums, certain types of beer and soft drink bottles,
					 wine barrels, chemical carboys, and gas cylinders.
All other containers are "nonreturnable containers."
					 Examples of nonreturnable containers are: wrapping and packing materials, paper
					 bags, twine, cartons, cans, medicine and distilled spirits bottles.
The term "deposit" as used herein means an amount charged
					 to the purchaser of the contents of the container with the understanding that
					 such amount will be repaid when the container or a similar container is
					 delivered to the seller. The term "deposit" as used herein does not include
					 amounts representing redemption or recycling values of beverage containers
					 pursuant to division 12.1 (commencing with Section
					 14500) of the Public Resources
					 Code whether or not such amounts are separately stated to the purchaser of the
					 contents of the container.