Laws, Regulations & Annotations
Business Taxes Law Guide – Revision 2013
Sales and Use Tax Annotations
280.0000 GIFTS, MARKETING AIDS, PREMIUMS AND PRIZES— Regulation 1670
280.1160 Use of Prize. "X" Co. distributes chances on a free automobile to customers as a means of furthering its sales of "Y" Co. products. The automobiles are purchased tax-paid by "X" Co. Following the award, "Y" Co. reimburses "X" Co. for the cost of the automobile. "X" Co. makes a taxable use of the automobiles in furthering its sales. The transfer of the automobile to the holder of the winning ticket in return for reimbursement paid by "Y" Co. is a taxable sale. For sales tax purposes it is of no consequence that a seller receives consideration from a person other than the person to whom he transfers the tangible personal property. 8/13/57.