Laws, Regulations & Annotations
Business Taxes Law Guide – Revision 2014
Sales and Use Tax Annotations
280.0000 GIFTS, MARKETING AIDS, PREMIUMS AND PRIZES— Regulation 1670
280.0950 Samples. The use of fabric purchased from out-of-state vendors to make sample garments only for demonstration and display to prospective purchasers before being sold to employees is not subject to use tax. Demonstration and/or display in the regular course of business is not included in the definition of use. The sales to employees are sales in the regular course of the taxpayer's business.
The situation differs from Annotation 280.1020 because, in that case, the garments were purchased specifically as a manufacturing aid in producing its own products and not for ultimate sale in the regular course of business after demonstration and display to prospective customers. 3/21/94.