Laws, Regulations & Annotations

Business Taxes Law Guide – Revision 2018

Sales and Use Tax Annotations

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480.0000 RETAILER

Annotation 480.0115

480.0115 Investor vs. Retailer—Guidelines. The law presumes that the gross receipts from the sales are subject to sales tax and that property shipped or brought into this state by the purchaser was purchased from a retailer for use in the state. Specifically, sales of tangible personal property to persons who hold the property for investment purposes or who hold the property as part of a collection are retail sales.

The following criteria will be considered in determining whether a person is holding property for resale in the regular course of business or is holding property for other purposes. The criteria are generally the same as those in Sales and Use Tax Regulation 1599 pertaining to the purchase of coins and bullion as an investment. (1) Whether the person has a place of business or otherwise clearly holds out to the public that he or she is engaged in the business of making retail sales of the type of property in question.

(2) Whether or not the person has records typical of a normal business (e.g., accounting records, advertising, letterhead stationary, business cards, or letterhead invoices).

(3) Whether the person has established suppliers of inventory.

(4) Whether the person makes sales sufficient in number, scope and character to require the person to hold a seller's permit for the sale of the type of tangible personal property in question.

(5) Whether the person does, in fact, hold a business license and seller's permit for sales of the tangible personal property in question.

(6) Whether there is evidence of merchandise available for sale to the public with discernible sales prices.

(7) Whether the person's markup over cost is an amount which shows a reasonable expectation of sale.

(8) Whether the person treats the activity as a business for income tax purposes and regularly reports income from the activity. 12/31/93.