Laws, Regulations & Annotations
Business Taxes Law Guide – Revision 2017
Sales and Use Tax Annotations
195.0000 CONTAINERS AND LABELS—Regulation 1589
(a) IN GENERAL—NONRETURNABLE CONTAINERS
195.0706 Packaging Material. A taxpayer packages merchandise for a client who sells the packaged merchandise to its customers. After the taxpayer packages the merchandise, the packaged merchandise is returned to the client who ships the packaged merchandise to their customers. The packaging materials purchased by the taxpayer are nonreturnable containers.
Sales tax does not apply to the sales of nonreturnable containers sold without the contents to persons who place tangible personal property in the containers for subsequent sale, regardless of whether such persons are the owners of the tangible personal property placed in the containers. Accordingly, the sale of such nonreturnable containers to the taxpayer who places its client's merchandise in the containers for subsequent sale by the client is not subject to sales or use tax. 3/26/96.