Elwood W. Driggs, Director, Sales Tax Division, Arizona State Tax Commission

Opinion 50-043. 4 pages (PDF version) file size: 327.07 KB. Letter to Director Elwood W. Driggs of the Sales Tax Division of the Arizona State Tax Commission clarifying the taxability under the Excise Revenue Act of 1935 (§ 73-1303 (d) (1), ACA 1939) of paper and certain other product sold to retailers when such products were used in serving food and drink and wrapping commodities purchased at such establishments. If an item is consumed by the retailer, sales tax is charged to the retailer. If an item is resold to the consumer, sales tax is not charged to the retailer. The question hinges on the definitions of "consumed" and "resold" as it appears in the section. If the item adds value to the commodity sold in it, it is resold to the purchaser unless title remains with the retailer and the item is intended to be returned to him. Straws and napkins are also considered "containers" for the purposes of determining tax, and are determined to be resold to the consumer.