Which sewing, cleaning, and packaging supplies sold to garment manufacturers did Texas classify as exempt, taxable, or fact-dependent?

Plain-English summary

The Texas Comptroller divided supplies sold to garment manufacturers into exempt, taxable, and unresolved groups. Every exempt sale required a properly completed exemption certificate.

The exempt list included cleaning and processing supplies such as detergents, soaps, bleaches and whiteners, starches, bacteria and germ inhibitors, spot removers, dyes, and dry-cleaning solvents. It also included mending tapes and patches, sewing and scrip threads, pocket and cuff replacements, buttons, and zippers.

Nonreturnable wrapping and packing used to further the garment sale also qualified. The letter expressly applied that condition to wrapping paper and, when used the same way, twine, plastic bags and other packaging plastic, paper bags, gum tape, wire ties and tape, shirt bands, coat hangers, trouser guards, shirt boards and stays, and shirt shells and bags.

The taxable list included press pads, covers, padding, and specified ironer parts; chemicals for cleaning press bucks; cloth sacks and transport bags; marking pencils, pens, tapes, and inks; bobbins; needles; and nylon draw cords.

The Comptroller could not rule without more facts on orthosilicates, sours, alkalis, impregnating compounds, solvent additives, water-softening minerals and salt, polyethylene basket liners, dust-control compound, bands for towels and covers, boiler and steam-system treatment chemicals, wash nets and pins, extractor slings, and basket covers.

What this means for you

The item's name alone did not always determine exemption. Packaging use and the item's role in manufacturing mattered, and the seller needed a valid exemption certificate. Items that did not clearly fit Rule 3.300(d) required a use-specific factual showing.

Common questions

Were sewing thread, buttons, and zippers exempt? Yes, with a properly completed exemption certificate.

Were bobbins and needles exempt? No. The letter lists them as taxable.

Were garment bags and hangers always exempt? No. The listed packaging items qualified only when used like nonreturnable wrapping or packing material to further the garment sale.

Did the Comptroller decide every submitted item? No. Fourteen categories required more information about the item and its manufacturing use.

Citations and references

• Comptroller Rule 3.300 — Manufacturing.
• Comptroller Rule 3.300(d) — identified as the guideline that the unresolved items did not clearly fit without more facts.

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/8704L0818C10

Original ruling text

April 23, 1987

Dear **:

Thank you for your recent letter concerning the taxability of various items
sold to garment manufacturers.

I have listed the items under exempt or taxable headings including those items
which may qualify under certain conditions. In all cases a properly completed
exemption certificate must be obtained from the purchaser. Rule 3.300 on
Manufacturing is enclosed for your reference.

Additional information is needed in order to determine the taxability of some
of the items. I have listed those items in a separate section at the end.

EXEMPT

1. Detergents
2. Soaps
3. Bleaches and whiteners
4. Starches
5. Bacteria and germ inhibitors
6. Spot removers
7. Dyes
8. Dry cleaning solvents
9. Mending tapes and patches
10. Sewing and scrip threads
11. Pocket and cuff replacements
12. Buttons
13. Zippers
14. Wrapping paper -- nonreturnable wrapping and packing material used to
    further the sale of the garment.
15. Twine - if use is the same as #14.
16. Plastic bags for packaging - if use is the sale as #14.
17. Plastic for packaging - if use is the same as #14.
18. Paper bags - if use is the same as #14.
19. Gum tape - if use is the same as #14.
20. Wire ties and tape - if use is the same as #14.
21. Shirt bands if use is the same as #14.
22. Coat hangers if use is the same as #14.
23. Trouser guards - if use is the same as #14.
24. Shirt boards and stays if use is the same as #14.
25. Shirt shells and bags if use is the same as #14.

TAXABLE

1. Press pads and padding
2. Press covers and coverings
3. F.W. Ironer pads, covers, aprons, and ribbons
4. Chemicals for cleaning press bucks
5. Cloth sacks for dirty towels
6. Marking pencils and pens
7. Marking tapes
8. Marking inks
9. Bobbins
10. Needles
11. Cloth transport bags
12. Nylon draw cords

The following items do not clearly fall within the guidelines of exempt
manufacturing items. (Section(d) of Rule 3.300.) A ruling is not possible
without additional information to define the item and its use in the
manufacturing process.

1. Orthosilicates
2. Sours
3. Alkalis
4. Impregnating compounds
5. Solvent additives
6. Water softening minerals
7. Salt for water softeners
8. Polyethylene basket liners
9. Dust control compound
10. Bands for towels and covers
11. Chemicals for treating boilers and steam systems
12. Wash nets and pins
13. Extractor slings
14. Basket covers

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

If you have any questions or need more information, please call me at
1-800-252-5555 toll free from anywhere in Texas. The regular number is
512/463-4600. You may write me at the Tax Administration Division.

Sincerely,

Julie Pesl
Tax Policy
Tax Administration Division