Laws, Regulations & Annotations
Business Taxes Law Guide – Revision 2013
Sales and Use Tax Annotations
195.0000 CONTAINERS AND LABELS—Regulation 1589
(b) RETURNABLE CONTAINERS
195.1450 Deposits Charged on Pallets. A supplier sells bags of sand stacked on pallets to a retailer. The supplier charges the retailer a deposit for the pallets. The retailer, in turn, sells the bags of sand to its customer and also charges a deposit for the pallets. When the customer returns the pallets to the retailer, and the retailer returns the pallets to the supplier, their deposits are refunded.
The supplier is the consumer of the pallets, and tax applies to its purchase. The deposit charged by the supplier to the retailer and the deposit charged by the retailer to the customer are nontaxable. 4/2/90.