Laws, Regulations & Annotations
Business Taxes Law Guide – Revision 2013
Sales and Use Tax Annotations
565.0000 UNITED STATES CONTRACTORS
(e) TITLE-PASSAGE CLAUSES
565.1415 Passage of Title—Qualified Production Services. A taxpayer contracted with the United States government to perform certain work which constituted "qualified production services" under Regulation 1529. Thus, under Regulation 1529, the taxpayer is the consumer of property it purchases to provide such services. At issue is whether or not Aerospace overrides the regulation and permits the taxpayer to buy property for resale to the United States government.
Aerospace held that the resolution of this issue is determined by the clauses of the contract. Since the contract at issue does not contain a title clause passing title to overhead items to the United States prior to use, the taxpayer is the consumer of the items that it purchased to perform qualified production services as provided in Regulation 1529. Therefore, it may not purchase such property for resale to United States. 7/29/96.