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BTLG Table of Contents > Sales and Use Tax Annotations > C > 195.0000 Containers and Labels > Annotation 195.0766

Sales and Use Tax Annotations

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C

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195.0000 Containers and Labels—Regulation 1589

Annotation 195.0766

(a) In General—Nonreturnable Containers

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195.0766 Paper Bags and Cleaning Supplies Withdrawn from Inventory. An operator of a grocery store purchases paper bags, wrapping paper, cleaning supplies, and office supplies for resale and then withdraws the items from resale inventory for use in its grocery store operations.

The sale and use of nonreturnable containers such as bags, wrapping paper, boxes, tapes, etc., are exempt from sales and use tax when those items are sold to a person who places the contents in the container and sells the content along with the container. Therefore, if the operator uses the paper bags and wrapping paper in this manner, such use is exempt from tax. However, the operator's use of other items withdrawn from resale inventory, e.g., cleaning and office supplies, is subject to use tax measured by the purchase price of those items. 8/6/96.