Laws, Regulations & Annotations

Business Taxes Law Guide – Revision 2018

Sales and Use Tax Annotations

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Annotation 565.0175


565.0175 Safety Shoes. A vendor sells safety shoes for use by employees of a U.S. supply contractor. The contractor provides the employees an allowance for the shoes. Any amount in excess of the allowance is withheld from employee's pay. Some of the contractor's contracts with the United States have provisions that title to property used by the contractor to fulfill the contract, passes to the United States prior to any use by the contractor.

The fact that employees reimburse the contractor for a portion of the cost of the shoes does not establish that the contractor purchased the shoes for resale. But for its contracts with the United States, the contractor would be the consumer of the shoes and the shoe vendor would owe sales tax on its sales to the contractor or use tax would apply to the contractor's use. However, the contractor is regarded as having purchased for resale those shoes which are allocated to government contracts containing the title passage provisions. With respect to all other shoes, tax applies to the sale to, or use by, the contractor. 8/20/93.