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Ezel / Tax Rulings / TX
TX 8507L0652B03 Sales and/or Use Tax (State,Local,MTA) 1985-07-26

Were single-use Quick Cups consumed in mandatory metal-casting quality control exempt from Texas sales tax?

Short answer: Yes. The cups qualified because they were used and consumed in the manufacturing process, and the manufacturer could give its supplier an exemption certificate.

Apply this to your situation

This page answers the general question as of 1985. Ezel answers yours, under current Texas tax law, with citations.

Currency note: this ruling is from 1985
Subsequent statutory amendments, regulation changes, court decisions, or later rulings may have changed the analysis. Treat this page as historical context, not current tax advice. Verify current law before relying on any specific rule, rate, or position mentioned here.
Disclaimer: This is an official 1985 Texas Comptroller taxpayer-response letter limited to single-use Quick Cups used to take a metal sample before casting for mandatory chemistry and quality-control analysis. It permits an exemption certificate because the cups were used and consumed in manufacturing. The body cites no numbered statute or rule and expressly says different facts could change the opinion. Current manufacturing, quality-control, laboratory-supply, consumable-item, exemption-certificate, and sales-tax rules may differ, and STAR documents may no longer represent current policy even when not marked superseded. Letters on STAR can support detrimental reliance only for the taxpayer to whom the letter was directly issued under 34 Tex. Admin. Code Rules 3.1 and 3.10. Taxpayer-identifying details are redacted. This summary is informational only and is not legal or tax advice.
About this page: The plain-English summary, reader guidance, and Q&A below were written by Ezel based on the official state tax ruling. The original ruling (linked on this page) is the authoritative source for any reliance.

Plain-English summary

Quick Cups qualified for exemption because they were used and consumed in the manufacturing process. Each cup took one metal sample before a casting was poured, enabling a quick laboratory analysis to confirm that the metal met specifications, and was then discarded.

The manufacturer could give the supplier an exemption certificate stating that the cups were used and consumed in manufacturing.

Common questions

What did the Quick Cups do? Each collected a pre-pour metal sample for rapid chemistry analysis and quality control.

Could a cup be reused? No. Each was good for one test and then discarded.

How could the manufacturer claim the exemption? By giving the supplier an exemption certificate describing the cups' use and consumption in manufacturing.

Citations and references

The reproduced letter cites no numbered statute or rule.

Source

Original ruling text

July 26, 1985

Dear ***:

Thank you for your letter concerning the taxability of "Quick Cups" used
in your manufacturing process as part of quality control.

Situation:
The Quick Cup is required to obtain a sample of metal prior to producing
(pouring) his casting. This is done to control the chemistry of the metal so
that it meets his metal specification. The sample of metal that is taken is
subjected to a quick lab analysis for this purpose. Each quick cup that is used
is good for only one test and is discarded after that sample is obtained. This
procedure is mandatory to our process for quality control.

Question:
In the past, we have paid tax on the purchase of these cups. Although the amount
of tax is not that significant, we would like to obtain a ruling on whether or not
it is actually subject to tax.

Answer:
The "Quick Cups" will qualify for exemption from sales tax. You should issue an
exemption certificate stating that the cups are used and consumed in the
manufacturing process to your supplier when purchasing.

This opinion is based upon the facts you presented. If there are additional or
different facts, this opinion may change.

Please feel free to contact us if you have additional questions. You may write us,
call toll free 1-800-252-5555 from anywhere in Texas.

Sincerely,

Tax Policy Section
Tax Administration Division

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