Continental Water Conditioning Co. of the Bay Area, Inc. v. State Board of Equalization

By its complaint, appellant Continental Water Conditioning Company of the Bay Area, Inc. (Continental), a California corporation, sought the refund of a sales tax which it paid under protest to respondent State Board of Equalization (Board). Continental appeals from the judgment entered in favor of Board following trial. We affirm.

I

Facts

We adopt in essential part the facts set forth by Board in its respondent’s brief which we find are supported by the record. Continental is in the business of selling and servicing water purification tanks. Continental’s customers are industries and hospitals. The tanks contain resins which remove impurities from water by a “deionization,” or ion exchange process. After repeated use the resins in the tanks become depleted and are no longer usable to remove the impurities. It is then necessary to “regenerate” the resins by flushing them with chemicals. The flushing process is performed at Continental’s plants by trained operators. Typically, Continental removes the depleted tanks from its customers and replaces them with similar tanks which have been regenerated. The customer is charged for each replacement.

*785 The charges for…