Laws, Regulations & Annotations

Business Taxes Law Guide – Revision 2017

Sales and Use Tax Annotations

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195.0000 CONTAINERS AND LABELS—Regulation 1589

Annotation 195.0725


195.0725 Pallets. A retailer asks whether the sales of pallets to a farmer are subject to sales tax. The farmer states that he/she sells food products on the pallets to various wholesalers and that the pallets are never returned.

The term "container" includes articles on which tangible personal property is placed for shipment, and specifically includes pallets. Since the farmer states that the pallets are not returned, the pallets are considered to be non returnable containers. Assuming the farmer does not use the pallets except to place his product on them and sells the pallet together with the product, the sale of the pallets would be exempt from sales tax. If the retailer takes a timely and valid exemption certificate in good faith, the retailer will not owe sales tax on the transaction to which it relates. 7/14/92.

(Note: Statutory change to section 6364, operative April 1, 2000, re food containers.) (Am. 2000–2).