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 195.0933


195.0933 Repairing Returnable Containers to be Used as Nonreturnable Containers. An oil company has repairs made to returnable containers (drums) after a number of uses. The repair process involves the furnishing of parts and materials as to which the repairmen is a retailer under Regulation 1546. After the drums are repaired, the oil company intends to use the drums as nonreturnable containers. Title to the drums remains with the oil company at all times until they are ultimately sold as nonreturnable containers. Under the above conditions, the repairman's charges for parts and material are exempt under Regulation 1589 because to the extent that new materials are added to the containers, the sales qualify as sales of nonreturnable containers sold without the contents to persons who place the contents in the container and sell the contents together with the container. The term "containers" as defined by Regulation 1589 includes materials from which such containers are manufactured. 2/22/93.