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acting only as an agent for the named principal. However, when the principal is not deemed to

be a dealer, such sales are considered to be those of the merchant and are taxable to him.

Reg. 62-465.1 Retail sales: repair services.

(a) Fair market value of parts and labor charges. The Tax Collector may examine

the reporting of all transactions covered by this Section to determine if an "armslength" price is charged for the parts and materials. The applicable tax may not

be avoided by pricing a part, which ordinarily sells to the customer at $10, at $5

and including the difference as "service" or "labor". In the absence of satisfactory

evidence supplied by the taxpayer as to industry or business practice, the Tax

Collector may use the cost of the part or materials to the taxpayer marked up by

a reasonable profit, to estimate the gross income subject to tax.

(b) (Reserved)

Reg. 62-465.2 Retail sales: warranty, maintenance, and similar service contracts.

(a) Gross income from sales of warranty, maintenance, and service contracts is

exempt from the tax imposed by Section 460.

(b) Transfers of tangible personal property in connection with a service, warranty,

guaranty, or maintenance agreement between a vendor and a vendee shall be

subject to tax under Section 460 only to the extent of gross income received from

separately itemized charges made for the items' of property transferred.

(c) The gross income derived from a maintenance insurance agreement, which

agreement is entered into between the purchaser and any person other than the

seller is not subject to imposed by Section 460. If the provider of the

maintenance insurance agreement pays for tangible personal property on behalf

of the insured in the performance of the agreement, such sales are subject to all

applicable taxes imposed by this Chapter.

(d) Charges for tangible personal property provided under the terms of a warranty,

maintenance, or service contract exempted under Section 465 are subject to tax

as retail sales.

(e) However, gross income received by a dealer from a manufacturer for work

performed under a manufacturer's warranty is not taxable under Section 460.

Reg.62-465.3 Retail sales: sale of containers, paper products, and labels.

(a) The sale of a container or similar packaging material which contains personal

property and which is transferred to the customer with the sale of the product is

not taxable as a sale for resale. Examples of such nontaxable containers

include but are not limited to:

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Packaging materials sold to a manufacturer of video equipment for

containment of the product during shipment.

Cellophane-type wrap sold to a meat department or butcher for

containment of the individually wrapped or contained meat.

8ags used to contain loose fungible goods such as fruits, vegetables, and

other products sold in bulk, where such bags or containers are used to

contain and measure the amount purchased by the customer.

Shopping bags and similar merchandising bags sold to grocery stores,

department stores or other retailers.

Gift wrappings and gift boxes sold to department stores or other retailers.

(b) Sales of non-returnable or disposable paper (and similar products such as plastic

or styrofoam) cups, lids, plates, bags, napkins, straws, knives, forks and other

similar food accessories to a restaurant or others taxable under Section 455 for

transfer by the restaurant to its customer to contain or facilitate the consumption

of the food, drink or condiment are sales for resales and not taxable.

(c) Where a retailer imposes a charge for gift wrapping and the charge includes the

container, paper, and other appropriate materials, the wrapping charge shall be

considered a sale.

(d) Charges for returnable containers, where the charges are imposed on the

customer, are subject to tax at the time of the transaction. A credit may be taken

for the amount of refund after such refund is made.

(e) The sale of labels to a purchaser who affIXes them to a primary container is a

sale for resale and not taxable. Directional or instructional material included with

products sold are considered to be part of the product and a sale for resale.

However, the sale of items such as price tags, shipping tags, and advertising

matter delivered to the customer in connection with the retail sale is taxable to

the retailer as a retail sale to it, and is not exempt as a sale for resale.

Reg. 62-465.4 Retail sales: Aircraft acquired for use outside the State.

Aircraft acquired for use outside the State means aircraft, navigational and communication

instruments, and other accessories and related equipment sold to:

(a) Any foreign government for use by such government outside of this State.

(b) Persons who are not residents of this state and who will not use such property in

this State other than in removing such property from this state. This subsection

also applies to corporations that are not incorporated in this State, regardless of

maintaining a place of business in this state, if the principal corporate office is

located outside this State and the property will not be used in this State other

than in removing the property from this State.

(Note: the above regulation is effective July 1,1995.)

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Reg. 62-470.1 Telecommunication services.

(a) Gross income from the business activity of providing telecommunication services

to consumers within this City shall not include:

(1) Charges for installation, maintenance, and repair of telecommunication

equipment which are subject to the provisions of Sections 415, 416, or

417 (construction contracting); 445 (real property rental); 450 (tangible

personal property rental); or 460 (retail sales); depending upon the nature

of the work performed.

(2) Separately billed advertising charges which are subject to the provisions

of Section 405 or 435.

(b) Mobile equipment In cases where the customer is being provided

telecommunication services to receivingltransmission equipment designed to be

mobile in nature (for example, mobile telephones, portable hand-held two-way

radios, paging devices, etc.), the provider shall, for the purposes of the tax

imposed by this Section, determine whether such provider's customers are

''within this City" as follows:

(1) By the billing address of the customer, provided that such address is a

permanent residence or business location of the consumer within the

State. .

(2) In all other cases, the business location of the telecommunications

provider.

Reg. 62-475.1 Distinction between transporting for hire and certain related activities.

The hiring of mobile equipment (cranes, airplanes, limousines, etc.) is deemed rental, leasing,

or licensing for use of tangible personal property whenever the charge is for a fixed sum or

hOUrly rate. By comparison, the activity of a common carrier conveying goods or persons for a

fee based upon distance, and not time, shall be considered transporting for hire.

Reg. 62-520.1 Reports made to the City.

(a) Each taxpayer shall provide, as a minimum, all of the following when reporting

taxes due as provided in this Chapter:

(1) Legal business name of the taxpayer or his agent.

(2) Mailing address of the taxpayer.

(3) City Privilege License number of the taxpayer.

(4) Period of time for which the report is intended.

(5) For each category of income to which the taxpayer is subject, for the

reporting period, as provided on the official City tax return:

(A) All amounts subject to, excluded from, exempt from, or deductible

from the tax imposed upon that category of business activity,

summarized in total as "gross receipts" of that category of

business activity.

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(8) The total amount claimed as excludable, exempted, or deducted

from such "gross receipts", itemized as provided on the official

City tax return, and summarized in total as "total deductions" for

that category.

(C) The difference between such "gross receipts" and "total

deductions" as "net taxable" for that category.

(D) The tax due and payable for that category.

That total amount subject to Use Tax, summarized as "net taxable", and

the Use Tax due and payable for that reporting period.

Any excess tax collected which is due and payable.

Any claimed tax credits against taxes due and payable.

Total amount remitted with the return.

A statement verifying that the infonnation provided on the return is

accurate to the best of the preparer's knowledge. Such statement must

be accompanied by a dated signature of the preparer, and also show the

preparer's title or relationship to the taxpayer.

Reg. 62-520.2 Change of method ofreporting.

(a) Any taxpayer electing to change his reporting method shall be pennitted to do so

only upon filing a written request to the Tax Collector and after receiving written

approval of the Tax. Collector. The approval shall state the effective date of the

change.

(b) The Tax Collector may postpone such approval to allow for examination of the

records of the taxpayer and may further require that all tax liability be satisfied up

to the effective date of the change.

(c) Failure of the taxpayer to notify the Tax Collector and await approval before

changing the method of reporting will subject the taxpayer to interest and

penalties if his original method of reporting would produce higher taxes due the

City. When a person makes such change without the consent of the Tax

Collector, the Tax Collector may audit his books and records to verify the tax

liability as of the date of the change.

(d) Any taxpayer who has failed to indicate a choice of reporting method upon the

application for a Privilege License shall be deemed to have chosen the accrual

method of reporting.

Reg. 62-555.1 Administrative Request for the attendance of witnesses or the production

of documents; service thereof; remedies and penalties for failure to respond.

(a) If a taxpayer refuses or fails to comply in whole or in part with a request to

provide records authorized by Section 555, the Tax Collector may issue his

written Administrative Request which shall:

(1) Designate the individual to provide infonnation.

(2) Describe specifically or generally the infonnation to be provided, and any

documents sought to be examined.

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State the date, time, and place in which the individual shall appear before

the Tax Collector to provide the information and to produce the

documents sought.

Be directed to: .

(A) Any director, officer, employee, agent, or representative of the

person sought to be examined; or

(B) Any independent accountant, accounting firm, bookkeeping or

financial service retained or employed by such person for any

purpose connected with business activity subject to taxation; or

(C) Any other person who, in the opinion of the Tax Collector, has

knowledge of facts bearing upon any tax liability of the person or

taxpayer from whom information is sought

(b) The failure of a taxpayer to comply with reasonable requests for records without

good reason or cause may, in the exercise of judicial discretion by a court, be

held to constitute a failure to exhaust administrative remedies.

Reg. 62-571.1 Collection of tax in jeopardy.

Evidence that collection of tax due is in jeopardy shall include documentation that

(a) The taxpayer is going out of business.

(b) The taxpayer has no City Privilege License or has no permanent business

location in the State. .

(c) The taxpayer has failed to timely pay any tax (or penalties and interest thereon)

due to the City on three (3) or more occasions within the previous thirty-six (36)

calendar months.

(d) The taxpayer has remitted payment by check, which has been dishonored.

(e) The taxpayer has failed to comply with a formal written request of the Tax

Collector made pursuant to Regulation 555.1.

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