Response
January 28, 1993
January
28, 1993
XXXXX
Re:
Advisory Opinion - Tagging Systems
Your
request for an advisory opinion regarding the appropriate treatment for sales
tax purposes of the tagging systems you sell to the laundry and dry cleaning
industry was referred to the Auditing Division for their analysis.
It
is the division staff recommendation that:
Sales
of labels, stickers, tags, etc. identifying a product, size, color, price, or
other information primarily for the benefit of the customer and remaining on
the item sold, cleaned, or repaired are considered to be sales for resale when
sold to a retailer.
Sales
of tags, fasteners, labels, stickers, sales slips, invoices, billing envelopes,
bills of sale, customer identification, inventory control, internal
instructions for cleaning or alteration, etc. which are primarily for the use
and benefit of the retailer or entity providing taxable services; are
considered to be sales of items consumed by the retailer, laundry, etc. This is
true even if such items incidentally remain on a garment when returned to a
customer. As such, the sale of these tags and fasteners by you to the laundry
would be subject to the tax. See
Enclosed Tax Commission Administrative Rule R865-19-48S, which is the basis for
this position.
Based
upon the facts presented in your letter, we are in agreement with the Auditing
Division's recommendations. Obviously, if there are deviations from these
facts, this opinion may be negated.
If
you do not agree with this determination, you may appeal to the Tax Commission
for a formal hearing. The results of that hearing would constitute a
declaratory judgment and be appealable to the Utah State Supreme Court. A
Notice of Appeal Rights and a copy of the Utah Taxpayer Bill of Rights are
attached.
In
contacting the Tax Commission, if special accommodations are needed in
accordance with the Americans with Disabilities Act, please call (801)
530-6920, (801) 530-6077 or TDD (801) 530-6269 allowing three working days
notice.
For
The Commission,
Joe
B. Pacheco
Commissioner
XXXXX
Utah
State Tax Commission
160
East 300 South
Salt
Lake City, Utah 84134
Dear
XXXXX
As
per our phone conversation, we are requesting a ruling from the Utah State Tax
Commission regarding the appropriate tax status of the tagging systems that we
sell to the laundry dry-cleaning industry.
These tags are typically attached to the garment. They can serve as a bill of sales, specify
alterations needed, special spotting requirements and inventory control.
Sincerely,
XXXXX