Laws, Regulations & Annotations

Business Taxes Law Guide – Revision 2018

Sales and Use Tax Annotations

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Annotation 295.1387


295.1387 Packing Charges and Government Inspection Costs. Taxpayer is in the business of selling tree seedlings, live Christmas trees, and container trees which require special packaging for protection from damage before shipping to the customer by UPS. Also, these types of items shipped in interstate commerce are required to be inspected and certified by the U.S. Government. The cost of packaging and inspection certificates is charged to customers.

The cost for labor and materials used in packaging an item before it is shipped is not a part of the transportation and must be included in taxable gross receipts. Also, there is no statute which excludes government inspection costs from the measure of tax or permits a deduction for such costs. Accordingly, such charges are taxable if they are in connection with a taxable sale. 11/15/91.