Laws, Regulations & Annotations

Business Taxes Law Guide – Revision 2018

Sales and Use Tax Annotations

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Annotation 565.1585


565.1585 Resale Certificate—U.S. Government Overhead Items. In a situation where a U.S. Government contractor is buying an overhead item (such as tax reference books) which it will use in the performance of both government and commercial contracts, and those government contracts contain the appropriate title passage clauses, the Aerospace decision permits the contractor to allocate part of the purchase price to its government contract.

Accordingly, the contractor may purchase the item for resale by issuing a resale certificate to the seller. It must then report and pay use taxes on the amount of the sale price allocable to the commercial contract. 2/26/92.