Laws, Regulations & Annotations

Business Taxes Law Guide – Revision 2018

Sales and Use Tax Annotations

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Annotation 565.0184


565.0184 Title Passage Clauses. Tangible personal property purchased pursuant to a U.S. government nonconstruction contract, may or may not be exempt from sales tax as a sale for resale. The determinative factors are the title passage clauses in the individual contracts. Generally, if the contract provides that title passes to the government before the contractor makes any use of the property, the property may be purchased under a resale certificate. However, some contracts may also include provisions that the government will not take title to specified property such as computer software, or to certain items costing less than a specified amount. Such items should not be purchased under resale certificate. 5/12/89.