The times-news. [volume] (Hendersonville, N.C.) 1927-current, 1933-07-14
NEW RULES TO
CLARITY Law
ON SALES TAX
Are of Importance to all
Merchants in Wholesale
and Retail Trade
By J. c. BASKERVILLE
The Times News Bureau
Sir Walter Hotel

RALEIGH. July 14.-Several
new rulings with regard to the
application of the sales tax law
tc merchants doing both a retail
and wholesale business, and an
swering questions of merchants
as to what shall be considered
wholesale transactions, we're an
bounced yesterday by Director
Harry Mcmillan of the sales tax
division of the department of rev.
enue, with the approval of Com
missioner of Revenue A. J. Max
well. Retail sales must be taxei
8 per cent of the gross sales,
under the 1888 revenue act, but
wholesale transactions are taxed
at the rate of one twenty-fltth' OF
che per cent. Hence these new
rulings are of tremendous inter-
est and Importance TO all whole
sale merchants or any merchants
doing both wholesale and retail
business.
at was never the intention Of
the general assembly to impose
the same rate of tax upon whole
sale merchants that it did on the
retail sales" Director Mcmillan
said. $50 these rulings have
been made to clarity the law and
make it as liberal as possible.
There is no doubt that if the 3
per cent sales tax should be as
sessed against wholesale sales, 1t
would make it impossible for
many wholesale merchants 20 OPP
crate and put them at 4 decided
disadvantage in competing with
wholesalers in other states. We
have tried to make these rulings
as liberal as possible so that the
tax would not prove unduly bur-
GenSOme."
The rulings were issued in qucs-
ton and answer form, each ques-
ton being composite of score
of questions that have been re-
ce.ved from merchants over the
state. These questions and an
swers, in condensed form, are as
follows:
Question: Is a sale of mer-
chandise to a person, firm or cor
poration engaged in the business
of selling mill machinery. parts,
ETC., for manufacturing industries
and plants, to be treated as
wholesale or retail sales?
Answer: Under section 404,
subsection 5 of the emergency
revenue act, the sale of mach
inery, machinery parts and acces-
series for manufacturing indus
tries and plants is exempted from
the 3 per cent retail sales tax and
are subject only to the whole
salers tax of one twenty-fifth of
one per cent.
Question: Will the sale articles
of merchandise to office build
ings, manufacturing plants and
institutions for use in these
places and when sold at wholesale
prices in competition with distri-
butOrs and manufacturers of such
articles, be liable to the 3 per
cent retail sales tax?
Answer: Such sales, when made
on wholesale basis and at whole
sale prices, should be treated and
reported as wholesale transac-
tions, and hence are not liable to
the 3 per cent tax. but only at
one twenty-fifth of one per cent.
Question: Will the sale of
building materials by a dealer in
building supplies who is not a
manufacturer, to contractor for
construction purposes, be subject
/ to the retail sales tax?
Answer: Sales made by a lum-
Der dealer to a contractor to be
used in the construction of a
| building, when such sales are
made in the wholesale manner,
should be treated as wholesale
rather than retail transactions
and only the wholesale tax i'm
pose.
Question: Would the sale of
towels, brooms. etc. sold to Of
flee buildings and manufacturing
plants in wholesale lots and at
wholesale prices, to be used only
in such buildings and plants, be
subject to the per cent retail
sales tax?
Answer: No. These sales are
to be considered as strictly whole
sale tax of one twenty-fifth of
one per cent.
Question: Will the sales of
wrapping paper, paper bags,
Irvine, paper cups, ETC.. sold to
merchants for the purpose of be-
ing used and consumed by such
merchants, be subject to the 8
per cent sales tax or the whole
sale tax?
Answer: These sales will be
subject to the wholesale tax only.
! Question: Will the sale of
mixed feed, when made by a feed
!, dealer to diaries, farmers, poul-
try raisers and others in whole
sale quantities, be liable to the
per cent retail sales tax?
Answer: No. Such sale shall
be subject only to the regular
wholesalers tax.
Question: Will the sale of
plumbing equipment and supplies
made by a plumbing supply deal
er to plumbers to be used in the
contracting business, when made
in wholesale lots at wholesale
prices. be subject to the 3 per
cent sales tax?
Answer: No. Such sales are
subject only to the regular whole
sales tax.
Question: Will a plumber who