REQUEST LETTER

 

02-022

 

NAME

ADDRESS

 

Dear NAME,

 

COMPANY sells nutritional, dietary, and skin care products through a multi-level network of independent distributors. We are considered an "COMPANY" or multi-level marketer such as COMPANY. Our physical location is in CITY, STATE. We charge sales tax based on where we ship to. COMPANY files one state sales tax return rather than each distributor filing a return with your state.

 

I have enclosed the labels of all of our products. Please provide us with a letter ruling or binding opinion if these products are taxable or exempt based on your state's tax laws regulations, etc. My fax number is FAX or my e-mail address is EMAIL.

 

If you need additional information for your determination of taxability, please call me at

PHONE. Thank you.

 

Sincerely,

 

NAME

 

RESPONSE LETTER

 

October 9, 2002

 

NAME

ADDRESS

 

RE: Private Letter Ruling – Taxation of COMPANY Products

 

Dear NAME,

 

You have requested a binding private letter ruling from the Tax Commission concerning Utah’s taxation of certain items sold by COMPANY, an out-of-state multi-level marketer. You have specifically inquired about COMPANY sale of nutritional and dietary bars and powders and included a description of a number of these items. You also asked about the sale of skin care products, although no description of these items was submitted.

 

All of these items are tangible personal property and their sale is taxable in Utah under Utah Code Ann. §59-12-103(1)(a). Utah does not have a specific exemption relating to nutritional and dietary products or skin care products. Products that are “medicine” or “home medical equipment or supplies,” as defined in Utah Code Ann. §59-12-102(12) and (16) (enclosed), are exempt from taxation under Utah Code Ann. §59-12-104(10). However, a review of the definitions for these categories indicates that your products, which are distributed by independent contractors and not prescribed and dispensed by medical personnel, do not meet the requirements of these exempt categories.

 

COMPANY, as an out-of-state multi-level marketing company, may remit Utah sales tax on behalf of its Utah independent contractors if it has entered into a multi-level marketing agreement with the Tax Commission. If this is the case, COMPANY would remit sales tax to the state based on the suggested retail price of goods it sends to its independent contractors. Should COMPANY not have such an agreement, it may pursue entering into one by contacting TAXPAYER REPRESENTATIVE, Auditing Division, at PHONE.

 

Should you have any other questions, please contact us.

 

For the Commission,

 

 

 

Marc B. Johnson

Commissioner

 

 

Enc.

 

MBJ/KC

02-022