Laws, Regulations & Annotations
Business Taxes Law Guide – Revision 2013
Sales and Use Tax Annotations
295.0000 GROSS RECEIPTS
295.0373 Lump-Sum Fee Includes Audio and Video Tapes. A taxpayer is engaged in operating and franchising weight loss centers and providing customers with individual counseling, lifestyle classes, and reference materials on weight loss and weight maintenance. Food is purchased separately and sales tax is paid on the sale of taxable food products. A one time fee is presently charged to customers, varying from $19 to $79 depending on whether there is a promotional program in effect.
The taxpayer is now considering charging a lump-sum fee of $199 which will entitle customers to individual counseling lifestyle classes, extensive reference material, audio tapes and video tapes. Currently the audio tapes are sold separately and the video tapes are not offered for sale. The cost of the tapes is $9.00 for the audio tapes and $11 for the video tapes.
Based on this scenario it is clear that the increase in the one time fee is related to the sale of the audio and video tapes. Therefore, the substantial portion of the proposed fee is attributable to the transfer of tangible personal property, and thus, the entire fee is subject to tax as gross receipts from the retail sale of tangible personal property. 1/12/94.