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BTLG Table of Contents > Sales and Use Tax Annotations > G > 295.0000 Gross Receipts > Annotation 295.0020

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G

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295.0000 Gross Receipts

Annotation 295.0020

(a) General

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295.0020 Adjustment of Purchase Price. A manufacturer sells trailers to its wholly owned subsidiary, which leases the trailers to others. When a particular trailer is transferred to the subsidiary, the manufacturer makes out an invoice indicating an arbitrary amount as the selling price. At the end of the fiscal year, the manufacturer determines its actual production costs and charges the subsidiary the difference between the originally invoiced amount and an amount which includes all of the manufacturer's costs for overhead, labor, materials, plus an amount for profit. The adjusted selling price, including the additional charges for overhead, labor, materials, and profit, as redetermined by the manufacturer, is the taxable purchase price to the subsidiary. 10/11/67.