Laws, Regulations & Annotations

Business Taxes Law Guide – Revision 2018

Sales and Use Tax Annotations

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195.0000 CONTAINERS AND LABELS—Regulation 1589

Annotation 195.0440


195.0440 Ham Bags Sold to Meat Packers. The primary use of the ham bag is to hold the ham during the curing process. At some time between the end of the curing process and the sale of the ham to the ultimate consumer, the ham bag is removed. If the bag is not removed until after the ham is sold by the meat packer (whether the sale by him is to a consumer, retailer, wholesaler or other person), the use of the ham bag by the meat packer falls within the nonreturnable container exemption. However, if the meat packer removes the bag before selling the ham, he does not come within the exemption and the sale to him of the bags is subject to tax.

If the meat packer does not know how he will handle a particular size bag, either of two procedures may be used. The meat packer may purchase ex tax under a resale certificate . . . and report on Line 2 of his own sales and use tax return the cost price of any bags of which he may make a taxable use. Or, the meat packer may purchase tax paid and take a deduction on his own return under the heading "Tax-Paid Purchases Resold" . . . for the cost price of bags which he sells with ham. 11/25/52.