Laws, Regulations & Annotations

Business Taxes Law Guide – Revision 2014
 

Sales and Use Tax Annotations


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S

515.0000 SERVICE ENTERPRISES GENERALLY—Regulation 1501

Annotation 515.0016.600

(a) IN GENERAL—SERVICE DISTINGUISHED FROM SALE

515.0016.600 Shipping Service. A firm purchases envelopes for overnight express service at a discount and sells the envelopes to others. The envelope is used by the overnight express company in essentially the same manner as the U.S. Postal Service uses postage stamps. Therefore, the supplier is making nontaxable sales of shipping services (by selling the prepaid "mailer") and the firm in turn is making nontaxable sales of shipping services rather than selling tangible personal property. However, if the firm transfers any other tangible personal property other than the envelope, the firm will be regarded as making taxable sales of such properties. For example, if the firm provides its customer with shipping materials such as "popcorn" for use by the customer to insulate the contents of the customer's shipments, the charges for such property would be subject to sales tax. 5/24/96.