Ala. Admin. Code r. 810-6-1-.69
Current through Register Vol. 43, No. 02, November 27, 2024
Section 810-6-1-.69 - Containers, Components Of Containers, Labels, Pallets, And Shipping Supplies(1) The term "label" as used in Sections 40-23-1(a)(9) b, 40-23-1(a)(9) c, 40-23-60(4) b, and 40-23-60(4) c, Code of Ala. 1975, and in this rule shall mean a tag or sticker of any material imprinted with information. The term "label" includes price stickers, address stickers, and shipping tags as well as those tags or stickers which identify or describe the property to which they are attached.(2) The term "components of containers" as used in this rule shall include partitions, cellophane, tissue paper, excelsior, gummed tape, scotch tape, glue, steel straps, twine, string, wire staples, wax paper, and wrapping paper which are used in and on containers to shape, form, preserve, stabilize, or protect the contents of the containers and which accompany the container and the container's contents upon shipment and delivery to the customer.(3) The term "container" as used in this rule shall mean articles in or on which tangible personal property is placed for shipment and delivery to the purchaser. Containers include bags, barrels, baskets, bottles, boxes, cans, cartons, cores, crates, cups, cylinders, drums, kegs, pails, plates, reels, sacks, and spools.(4) Containers purchased by manufacturers or compounders for use in packaging products manufactured or compounded by them for sale, including the components of the containers, are not subject to sales or use tax where such containers are passed on to the purchaser of the products contained therein with no intention on the part of either the purchaser or the seller to return the containers or have them returned for reuse. (Sections 40-23-1(a)(9) b and 40-23-60(4) b). (a) This exclusion for manufacturers and compounders may apply to both inner and outer containers. Accordingly, when manufacturers or compounders place their manufactured or compounded products in cans or bottles and place the cans or bottles in fiber boxes for shipment to the customer; the cans or bottles and the fiber box qualify for the exclusion if both are intended for one-time use. Alabama-Georgia Syrup Co. v. State, 253 Ala. 49, 42 So. 2d 796 (1949).(b) Containers, when purchased by manufacturers or compounders for use in purchasing and storing product ingredients prior to using them as ingredients in the manufacturing or compounding process and not purchased for use as one-time-use containers for shipping the manufactured or compounded product to customers, do not qualify for the exclusion. Alabama-Georgia Syrup Co. v. State, 253 Ala. 49, 42 So. 2d 796 (1949).(5) Containers purchased by retailers for use in packaging products for sale, including the components of the containers, are not subject to sales or use tax where the containers are passed on to the purchaser of the products contained therein with no intention on the part of either the purchaser or the seller to return the containers or have them returned for reuse. (Sections 40-23-1(a)(9) c and 40-23-60(4) c).(6) Containers and other packaging materials or supplies which are used or consumed in rendering nontaxable services are taxable when purchased by the person who performs the service even when the containers, materials, or supplies are transferred to the purchaser's customer. For example, the operator of a laundry or dry-cleaning establishment is the user or consumer of laundry bags, garment bags, and other packaging materials or supplies and must remit sales or use tax on purchases of these items even though the bags, materials, or supplies may be transferred to the operator's customer.(7) Unless excluded by statute, containers, including the components of the containers, which are intended to be returned or repurchased for reuse are subject to sales or use tax. Sales of the following items are specifically excluded from sales or use tax regardless of whether there is an intent on the part of the purchaser or the purchaser's customer to return the containers or have them returned for reuse: (a) Sales of containers to persons engaged in selling, supplying, or furnishing baby chicks to growers where the containers are for use in the delivery of the baby chicks to the grower. (Sections 40-23-1(a)(9) f and 40-23-60(4) f).(b) Sales of egg crates and egg cartons to egg producers for use in the delivery of eggs to distributors or packers. (Sections 40-23-1(a)(9) f and 40-23-60(4) f).(c) Sales of bagging and ties for use in preparing cotton for market. (Sections 40-23-1(a)(9) g and 40-23-60(4) g).(d) Sales of wrapping paper and other wrapping materials to producers, processors, packers, or wholesale or retail sellers of poultry or poultry products for use in preparing poultry or poultry products for delivery, shipment, or sale. This exemption includes (i) pallets used in shipping poultry and eggs, (ii) paper, and (iii) other materials used to line boxes or other containers in which poultry or poultry products are packed together with any other materials including ice placed in the containers for the delivery, shipment, or sale of poultry or poultry products. (Sections 40-23-4(a)(20) and 40-23-62(21)).(8) Labels are purchased at wholesale, tax-free when (i) the label is purchased by a manufacturer or compounder and affixed to the tangible personal property or product which the manufacturer or compounder manufacturers of compounds for sale or to the furnished container thereof or (ii) the label is purchased to be affixed to one-time-use containers that are purchased without contents and sold or furnished to the purchaser's customer along with the contents placed therein or thereon for sale. (Sections 40-23-1(a)(9) b, 40-23-1(a)9 c, 40-23-60(4) b, and 40-23-60(4) c).(9) Pallets purchased without contents by persons who sell or furnish the pallets along with the contents placed on the pallets for sale are excluded from sales or use tax where the pallets are passed on to the purchaser of the products contained thereon with no intention on the part of either the purchaser or the seller to return the pallets or have them returned for reuse. (Sections 40-23-1(a)(9) d and 40-23-60(4) d).(10) Crowns, caps, and tops sold to manufacturers or compounders for use upon containers in which the manufacturer or compounder markets its products are excluded from sales or use tax when the crowns, caps, or tops are intended for one-time use only. (Sections 40-23-1(a)(9) e and 40-23-60(4) e).(11) Except for supplies which qualify for the exemptions contained in Section 40-23-4(a)(10), 40-23-4(a)(40), 40-23-4(a)(42) c, 40-23-62(12), 40-23-62(32), and 40-23-62(34) c, shipping supplies such as nails, lumber, metal straps, dunnage, and plates which are used for fastening or securing manufactured or compounded products into railroad cars, trucks, aircraft, or vessels for shipment are taxable at the time of purchased.(12) Purchases by retailers, wholesalers, and others of sales tickets, cash register receipt paper, invoice forms, bill of lading forms, and other forms for use in receipting, billing, invoicing, or shipping are taxable.(13) The following are examples of items sold by suppliers to certain retailers or service providers with notations as to whether the item qualifies as a nontaxable one-time-use container: (a) RETAIL FOOD STORES (GROCERY & MEAT MARKETS): Adding Machine Tape | T |
Bags and Sacks | NT |
Bag Holders | T |
Brooms - Use | T |
Broom Holders & Display Racks | T |
Butcher Paper | NT |
Cashier Pads | T |
Cellophane Bags | NT |
Cellophane, Sheets or Roll | NT |
Cellophane Cutters | T |
Egg Cartons | NT |
Food Pails and Tubs | NT |
Greaseproof Paper | NT |
Grocery Bags | NT |
Gum Tape | NT |
Gum Tape Dispensers | T |
Heat Sealing Equipment | T |
Ice Cream Bags | NT |
Labels | NT |
Locker Paper | NT |
Marking Pencils | T |
Meat Boards | NT |
Meat Interleaver | NT |
Paper Cans | NT |
Paper Cutters | T |
Parchment | NT |
Patty Paper | NT |
Plastic Film | NT |
Pork Loin Wrap | NT |
Prepackaging Trays | NT |
Pressure Sensitive Tape | NT |
Price Markers | T |
Produce Bags | NT |
Roll Paper | NT |
Sausage Boxes and Liners | NT |
Signboard | T |
Skewer | T(1) |
Steak Interleaver | NT |
Sugar Bags | NT |
Sweeping Compound | T |
Ti-Paks and Twisters | NT |
Trays | NT |
Twine | NT |
Window Display Bags | NT |
(1) Nontaxable only if accompanies sale and cannot be reused.(b) FOOD AND BEVERAGE SERVERS: (Restaurants, Drive-ins, Cafeterias, Concession Stands, Bars, Lounges and Night Clubs) Adding Machine Tape | T |
Aluminum Foil | T |
Aluminum Plates | NT |
Barbeque Bags | NT |
Bibs | NT(2) |
Burger Cups | NT |
Burger Cup Holders | T |
Butter Chips | NT |
Chop holders | T |
Coasters | T |
Cocktail Forks and Spoons | T(1) |
Coffee Stirrers | NT(2) |
Crab Shells | NT(1) |
Creamer Caps | T |
Cups and Lids | NT |
Cup Carriers | NT(1) |
Cup Dispensers | T |
Doilies | T |
Eclair Cases | NT |
Guest Checks | T |
Hot Dog Trays | NT |
Kone Bottles | NT |
Napkins | NT(2) |
Napkin Dispensers | T |
Paper Bags | NT |
Paper Cans and Pails | NT(1) |
Paper Plates | NT |
Paper Cans and Pails | NT |
Paper Plates | NT |
Paper Trays | NT |
Paper Linen Caps | T |
Paper Liners for Food Trays | NT |
Patty Paper | NT |
Place Mats | NT(1) |
Printing Charge on Special |
Print Orders | T |
Sandwich Bags | NT |
Sandwich and Drink Trays | NT |
Skewers | T |
Soufflé Cups | NT |
Steak Markers | NT(1) |
Straws | NT(2) |
Sundae Dishes | NT(1) |
Table Covers | T |
Table Wiping Towels | T |
Tableware, Plastic & Spoons | NT(2) |
Tissue, 12 x 12 M.G. | NT(1) |
Toilet Tissue | T |
Tooth Picks and Frills | T |
Towelettes, Moist | NT(2) |
Towels | T |
Tray Covers | T |
Waxed Paper | NT(1) |
Wooden Forks and Spoons | NT(2) |
Wooden Dishes | NT(1) |
Wooden Skewers | NT(2) |
(1) Nontaxable only if accompanies sale and cannot be reused.(2) Amended to conform to the decision of the Alabama Court of Civil Appeals in the case, State Department of Revenue v. Kelly's Food Concepts of Alabama, LLP(c) LAUNDRY AND DRY CLEANING SUPPLIES: Bridal Gown Boxes | T |
Coat Retainers | T |
Collar Supports | T |
Garment Bags, | T |
Garment Roll Film | T |
Garment Roll Film Dispenser Racks | T |
Hanger Shields and Guards | T |
Hangers | T |
Laundry Boxes | T |
Laundry and Launderette Bags | T |
Laundry Shells | T |
Paper Cutters | T |
Shirt Bags | T |
Shirt Bands | T |
Shirt Boards | T |
Shirt Boxes | T |
Shirt Pax | T |
Shirt Shells | T |
Storage Bags | T |
Sweater Bags | T |
Tape | T |
Trouser Guards | T |
Twine | T |
Wrapping Paper | T |
(d) RETAIL BAKERY AND CANDY SHOPS: Adding Machine Tape | T |
Aluminum Foil | NT(1) |
Aluminum Pie and Cake Plates | NT(1) |
Bakery Bags | NT |
Bakery Boxes | NT |
Bakery Tissue | NT |
Baking Cups | NT(l) |
Bread Bags | NT |
Cake Circles | NT(1) |
Candy Bags | NT |
Jiffy Bags | NT |
Labels | NT |
Marking Pencils | T |
Pan Liners | NT(1) |
Paper Cans | NT |
Paper Caps | T |
Paper Cutters | T |
Paper Pie Plates | NT(l) |
Parchment | NT |
Ribbon | NT |
(1) Nontaxable only if accompanies sale and cannot be reused.(2) If used as part of package. Candy Cups | NT |
Cellophane | NT |
Cellophane Bags | NT |
Doilies | NT(1) |
Eclair Cups | NT(1) |
Food Pails and Tubs | NT(1) |
Gift Wrap | NT |
Glassine Bags | NT |
Grocery Bags | NT |
Gum Tape | NT(2) |
Gum Tape Dispensers | T |
Heat Sealing Equipment | T |
Sales Books | T |
Sandwich Bags | NT |
Sandwich Wrap | NT |
Shredded Cellophane | NT |
Signboard | T |
Sweeping Compound | T |
Tooth Picks and Frills | T |
Transparent Tape | NT(2) |
Twine | NT |
Wax Paper | NT |
Window Bags | NT |
Wrapping Paper | NT |
(e) DRUG, VARIETY, AND SUNDRY STORES: (See also Food and Beverage Servers) Adding Machine Tape | T |
Gift Wrapping Paper | NT |
Grocery Bags | NT |
Guest Checks | T |
Gum Tape | NT |
Gum Tape Dispensers | T |
Prescription Medicine |
Bottles | NT(1) |
Prescription Medicine |
Boxes | NT(1) |
Prescription Medicine Jars NT(1) |
Millinery Bags | NT |
Notion Bags | NT |
Paper Cutters | T |
Prescription Bags | NT |
Ribbon and Accessories | NT |
Sanitary Napkin Bags (resale) | NT |
Shopping Bags | NT |
Signboard | T |
Twine | NT |
Wrapping Paper | NT |
(1) Nontaxable only if accompanies sale and cannot be reused(2) If used as part of package(f) FLORISTS AND NURSERIES: (1)Cellophane | NT |
Cellophane Bags | NT |
Cellophane Tape | NT |
Florist Tissue | NT |
Flower Boxes | NT |
Gift Papers and Foil | NT |
Gummed Tape | NT |
Gummed Tape Dispensers | T |
Paper Bags | NT |
Polyethylene Rolls and Bags | NT |
Polyethylene & Paper Cutters | NT |
Pressure Sensitive Tape | NT |
Ribbon and Accessories | NT |
Shredded Cellophane | NT |
Twine | NT |
Wrapping Paper | NT |
Wrapping Tissue | NT |
(g) RETAIL DEPARTMENT STORES & SPECIALTY STORES: (Includes Book & Stationery Stores, Gift Shops, Hardware Stores, etc.) Curtained Rod Bags | NT |
Garment Bags | NT |
Garment Bag Boxes | NT |
Gift Boxes | NT |
Gift Wrap | NT |
Grocery Bags | NT |
Gum Tape | NT |
Gum Tape Dispenser | T |
Ice Bags | NT |
Jiffy Bags | NT |
Labels | NT |
Lampshade Bags | NT |
Marking Pencils | T |
Millinery Bags | NT |
Millinery Boxes | NT |
Nail Bags | NT |
Notion Bags | NT |
Paper Cutters | T |
Record Bags | NT |
Ribbon and Accessories | NT |
Sales Books | T |
Shirt Bags | NT |
Shoe Bags | NT |
Shopping Bags | NT |
Shredded Cellophane | NT |
Shredded Tissue | NT |
Signboard | T |
Transparent Tape | NT |
Twine | NT |
Wrapping Paper | NT |
Wrapping Tissue | NT |
(h) MEAT AND POULTRY PACKERS, FOOD LOCKERS AND DAIRIES: (1) Butcher Paper | NT |
Butter Tubs | NT |
Butter Wraps | NT |
Cellophane and Plastic Films | NT |
Cellophane Tape | NT |
Chic Pax | NT |
Chic Trainer Trays | NT |
Cone Bottles | NT |
Creamer Caps | NT |
Cups and Tubs | NT |
Egg Cartons | NT |
Freezer and Locker Paper | NT |
Freezer Tape | NT |
Grocery Bags | NT |
Gum Tape | NT |
Gum Tape Dispenser | T |
Ham Wraps | NT |
Ice Cream Bags | NT |
Ice Cream Cans and Carton | NT |
Ice Cream Pails | NT |
Ice Cream Sticks | NT |
Marking Pencils | T |
Meat Boards | NT |
Parchment | NT |
Poly Bags | NT |
Pork Loin Wrap | NT |
Poultry Bags | NT |
Sacks | NT |
Sausage Boxes & Liners | NT |
Spoons, Forks and Knives | T |
Straws | T |
Ti-Paks and Twisters | NT |
Twine | NT |
Waxed Paper | NT |
Wrapping Paper | NT |
(1) If the sales are made to a food locker business - it must be determined if the products are used in rendering a service, or if they are in the actual retail meat business. If they are wrapping meat for customers to be stored in their individual lockers - this is a service and the items are taxable.(i) FARMS, ASSEMBLERS OF FARM PRODUCTS: Box Liners | NT |
Butter Tubs | NT |
Car Liners | T |
Cellophane | NTNT |
Cellophane Bags | NT |
Cellophane Tape | NT |
Chic Pak | NT |
Chic Trainer Trays | NT |
Containers for Packaging |
Bees or Worms for Sale | NT(1) |
Egg Cartons | NT |
Flour and Meal Bags | NT |
Fruit Baskets | NT(1) |
Grocery Bags | NT |
Gum Tape | NT |
Gum Tape Dispensers | T |
Hay Baling Ties or Twine | NT(1) |
Labels | NT |
Marking Pencils | T |
Poly Bags | NT |
Poly Sheets and Rolls |
Potato Bags | NT |
Poultry Bags | NT |
Prepackage Trays | NT |
Shredded Paper and |
Cellophane | NT |
Tomato Cartons | NT |
Twine | NT |
Window Bags | NT |
Wrapping Paper | NT |
Wrapping Tissue | NT |
(1) Nontaxable if accompanies sale and cannot be reused.Ala. Admin. Code r. 810-6-1-.69
Amended by Alabama Administrative Monthly Volume XXXIII, Issue No. 05, February 27, 2015, eff. 3/3/2015.Author: Ginger Buchanan
Statutory Authority: Code of Ala. 1975, §§ 40-2A-7(a)(5), 40-23-1(a)(9) d, 40-23-1(a)(9) e, 40-23-1(a)(9)(f), 40-23-1(a)(9) g, 40-23-4(a)(10), 40-23-4(a)(20), 40-23-4(a)(40), 40-23-4(a)(42) c, 40-23-31, 40-23-60(4) d, 40-23-60(4) e, 40-23-60(4) f, 40-23-60(4) g, 40-23-62(12), 40-23-62(21), 40-23-62(32), 40-23-62(34) c, 40-23-31, 40-23-83.