Laws, Regulations & Annotations

Business Taxes Law Guide – Revision 2018

Sales and Use Tax Annotations

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432.0000 PRINTED SALES MESSAGES—Regulation 1541.5

Annotation 432.0044

432.0044 Food Tray (Carrier) Used at Sporting Events, etc. A firm produces (through an outside manufacturer) food carriers which consist of a cup carrier and an integrated food tray. The firm will contact a potential advertiser to offer advertising exposure on the food carrier. For instance, a company will purchase one season's advertising at a major baseball stadium. The finished food carrier with the company's advertising on it are delivered to the stadium and given to the concessionaire free of charge. The concessionaire gives them to fans who purchase multiple food items. Once the season is completed, the firm removes the unused food trays from the stadium in favor of the advertiser for the next season. Neither the advertiser nor the concessionaire has the right to use or dispose of the unused units without authorization of the firm.

If the firm is producing the carriers on its own behalf and is merely selling advertising space to a number of clients, the firm would be the consumer of, and tax would apply to the sale to the firm of the carriers. Tax would not apply to the firm's charge for the advertising space. However, in this case, when the firm produces carriers for only one specific advertiser and delivers the carriers to the advertiser or to another person, such as the concessionaire, on behalf of the advertiser, the firm's transaction is a retail sale of the carrier to the advertiser.

This transaction would not qualify for the printed sales message exemption since the exemption is limited by its terms to the sale of "catalogs, letters, circulars, brochures, and pamphlets." The food and drink carriers are not within the type of printed material listed; therefore, the firm's sales of the carrier would not qualify for the exemption. 7/11/96.