Laws, Regulations & Annotations
Business Taxes Law Guide – Revision 2013
Sales and Use Tax Annotations
505.0000 SALES TO THE UNITED STATES AND ITS INSTRUMEN-TALITIES—Regulation 1614
(a) IN GENERAL—AGENCIES QUALIFYING FOR SALES TAX EXEMPTION
505.0025 Agent of the National Potato Board. A photographer sold photographs to a firm which claimed to be acting as agent for the National Potato Board (an instrumentality of the United States). The firm paid the invoice with its own check and presented the photographer with a letter sent to the firm stating: "The (firm) is authorized as agent to purchase property for the National Potato Promotion Board for use in furtherance of the Board's advertising, research and public relations activities on behalf of the United States' potato industry."
The fact that the firm paid the invoice with its own check suggests that the firm purchased the photographs on its own account or for resale rather than as an agent of the Potato Board. As stated in Regulation 1614(a)(4), when the nonexempt party makes full payment and later seeks reimbursement, then that party and not the United States government is considered the actual purchaser of the property. If the firm is the retailer of the photographs rather than an agent of the Potato Board and if title passed to the Potato Board prior to any use by the firm, the firm could purchase the property ex-tax for resale by issuing to the photographer a timely and valid resale certificate. 12/7/93.