97-076
Response January 5, 1998
November
17, 1997
Ref: Request for Written Ruling
Dear
Kenneth:
COMPANY
A is a metal building manufacturer and is a registered retailer in the state of
Utah. We are required to collect sales/use tax in your state. We have a customer
that is located in Colorado that is purchasing a metal building from us. This
Colorado customer has requested that we ship this building via common carrier
to his customer who is located within the state of Utah and drop-ship the
building at the Utah jobsite (third-party drop shipment transaction). Our
Colorado customer is not registered in the state of Utah.
Will
the state of Utah accept our customer's Colorado number or does Utah require
anyone doing business in your state to register for sales tax? If Utah will
accept the Colorado customer's number, what documentation will be required for
our files to support this exemption?
Also,
quite often, we have the exact same transaction as described above, but the
Colorado customer will retain the common carrier, send it to our plant to pick
up the building, and then deliver the building to the end-user in Utah. Does the tax liability remain the same in
this transaction? f not, where does the tax liability occur?
So
that we may better serve our customers and the state of Utah, please provide a
written
ruling
on the above questions as soon as possible. You may mail your response to my
attention
at the mailing address shown above. Thank you.
Sincerely,
COMPANY
A
January
5, 1998
NAME
ADDRESS
CITY
STATE ZIP
Advisory
Opinion - Interstate Sales
Dear
NAME,
We have received your request for
sales tax information pertaining to interstate sales. We offer the following guidance.
We offer this guidance upon our understanding that you only sell the
buildings, and that you do not install the buildings on behalf of your Colorado
customer. We also assume from the facts
in your letter that your Colorado customer is making retail sales in Utah.
COMPANY A may make tax free sales
for resale to the Colorado retailer.
Like other exempt sales, your company must obtain an exemption
certificate from the Colorado retailer.
The Colorado retailer may use its Colorado sales tax license number on
this form. If you are unable to obtain
an exemption certificate from that customer, you must collect sales tax on the
transaction. (See enclosed copy of Utah
Administrative Rule R865-19S-23). The
resale exempt applies, no matter who arranges transportation.
This opinion addresses only your
sales tax liability under the facts disclosed.
We are not rendering an opinion as to whether your Colorado customer has
nexus. If that issue arises in your
discussions with your customer, please refer the customer to us. We are sure they will be interested to learn
whether their activities in Utah may create nexus and tax liability.
Please let us know if you have other
questions.
For
the Commission,
Joe
B. Pacheco,
Commissioner
^^