Laws, Regulations & Annotations

Business Taxes Law Guide – Revision 2018

Sales and Use Tax Annotations

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475.0000 RESALE CERTIFICATES—Regulation 1668

Annotation 475.0193

475.0193 Retailer. A person may be considered a dealer in stamps (i.e., will conduct business as a seller) only if he is engaged in the business of selling stamps in addition to any purchases for investment (consumption) he may otherwise make. Even if he qualifies as a dealer in stamps, he may not issue resale certificates for purchases as an investment (as opposed to purchases in stock and trade). The purchase of a long term investment is a purchase for use, and if the person has issued resale certificates for such stamps, tax must be paid measured by the sales price.

It is clear that a person who purchases stamps with the intention to resell in the ordinary course of business of selling that kind of tangible personal property may, in addition, purchase stamps for consumption. A purchase with the expectation of an eventual resale to realize a gain does not preclude the determination that the purchase was also for storage, use or other consumption within the meaning of the Sales and Use Tax Law.

This conclusion is based on the meaning of holding goods for sale in the ordinary course of business. The "business" of a seller means a business of one whose activity and concern is the distribution and sale of goods. This is in contrast to the business of an investor whose purpose is to hold goods from the market as a store of value. 8/6/65.