Laws, Regulations & Annotations
Business Taxes Law Guide – Revision 2017
Sales and Use Tax Annotations
325.0000 INTERSTATE AND FOREIGN COMMERCE—Regulation 1620
325.0232 Ad Valorem Tariffs. An ad valorem tariff is imposed by the U.S. government on certain wood products including shakes and shingles imported from Canada. The identity of the person legally responsible for paying the tariff under federal law is the critical factor in determining whether sales or use tax applies to the amount of the tariff. The consignee of the imported wood products is the person legally responsible for payment of the tariff and the consignee is the importer of the record of the imported wood products for purposes of the tariff laws. Thus, the consignee is legally responsible for payment of the tariff to the United States. Therefore, if the seller is the consignee (importer) and passes the amount of the tariff on to the customer, it is a part of the sale price, and the amount of the tariff must be included in the taxable measure. On the other hand, if the customer is the consignee (importer), the tariff is not part of the taxable sale price.
Additionally, if a broker is involved in the transaction, the rules discussed above continue to apply. If the broker is the consignee under federal law, the taxable result would depend on whose behalf the broker acts as agent. If the broker is the seller's agent, the amount of the tariff is subject to tax. If the broker is the customer's agent, the amount of the tariff is not subject to tax. 4/8/87.