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 432.0140

432.0140 Taxpayer as Consignee. Directories, which qualify as printed sales messages, are printed to the special order of the taxpayer. The sellers ship the directories by common carrier to an address specified by taxpayer. The carrier is an independent contractor. The address specified by taxpayer is usually a parking lot centrally located within the area or neighborhood in which the directories are to be delivered. The bills of lading all show taxpayer as the consignee. Taxpayer hires individuals to deliver the directories to homes and businesses. Taxpayer believes that the individuals deliver the directories as independent contractors and not as his/her employees.

Under the facts described above, the sales of directories do not qualify for exemption. Since the bills of lading show the taxpayer as consignee, the directories are sent to the taxpayer, rather than to "any other person at no cost to that person who becomes the owner thereof". In accordance with Sales and Use Tax Regulation 1541.5(d)(6), tax applies to sales of printed sales messages which are delivered to the purchaser. The taxpayer's action of immediately turning the directories over to independent contractors to then deliver to donees does not provide a basis for exemption. 9/19/90.