In a memo released in the wake of its success in a court case addressing the issue earlier this year, Texas elaborated on its reasons for denying companies performing refurbishment services a manufacturing exemption on wrapping and packaging items. The state argued that refurbished items being returned are not being packaged for “for ultimate sale” under the wording of the exemption, and that the packaging materials used to deliver the product of a refurbishment service to the customer do not qualify for exemption. The court agreed, also clarifying that any packaging materials not transferred to the end customer do not qualify for exemption, as they do not become component parts of a product. The state ends the memo with a statement of policy, clarifying that sellers of taxable services do not qualify for manufacturing exemptions for tangible personal property used by customers to acquire a tangible service, or on wrapping and packaging supplies. (Texas Comptroller of Public Accounts, Letter No. 202208017L, August 8, 2022)