Laws, Regulations & Annotations

Business Taxes Law Guide – Revision 2018

Sales and Use Tax Annotations

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140.0000 BARTER, EXCHANGE, "TRADE-INS"—Regulation 1654

Annotation 140.0003

140.0003 Barter, Exchange, etc.—Tangible for Intangible. A TV manufacturer provides a new TV set to a television network for use as a prize on a game show ". . . in exchange for an identification." The agreement between the parties specifies that if conditions prevent the network from giving the contracted identification, they will pay for the TV set ". . . at dealers' cost." This establishes the gross receipts from the exchange of the TV set, which is a taxable sale by the manufacturer in spite of the fact that the consideration normally received is intangible air time.

In the absence of wording in the agreement implying or specifying the value of the property or air time being exchanged, the suggested retail price of the property contained in the agreement would be the measure of tax. 8/22/78.