Opinion ID: 2168802
Heading Depth: 1
Heading Rank: 9

Heading: pledger v. simpson press, inc ., distinguished

Text: Finally, Affiliated Foods cites a decision by the Arkansas Supreme Court in which it determined that postage charges were not part of the sales price of advertising brochures. See Pledger v. Simpson Press, Inc., 304 Ark. 274, 801 S.W.2d 44 (1990). In Simpson Press, Inc., the defendant-appellee, Simpson Press, printed advertising brochures for direct mail advertisers. Upon a customer's request, Simpson Press would use its bulk mail permit to purchase the necessary postage and mail the brochures. Under this arrangement, Simpson Press would first collect the estimated cost of the postage from the customer, then later make an adjustment to the customer's account if necessary. Simpson Press charged sales tax on the advertising brochures, but not on the postage charges. The Arkansas Department of Finance and Administration performed an audit of Simpson Press and assessed a sales tax on the postage charges. The Arkansas Supreme Court held that Simpson Press' postage and mailing service should not be included as a part of the sale of the advertising brochures for two reasons. First, the Arkansas court determined that Simpson Press was merely acting as its customers' agent by providing a postage and mailing service. The Arkansas court reasoned that tax could not be collected from Simpson Press because it merely offered a service for its customers' convenience. Under Arkansas statutory law, a sale shall not include the furnishing or rendering of services, except as provided, and neither postage nor mailing is a service provided for in the Arkansas statutes. See, currently, Ark.Code Ann. § 26-52-103(a)(3)(E) (Michie 1997 & Supp.1999). We are not persuaded by this rationale because the Nebraska statutes provide that [t]he total amount for which tangible personal property is sold shall include any services which are a part of the sale....  (Emphasis supplied.) § 77-2702.17(1)(c). The second basis for the Arkansas Supreme Court's holding is also inapplicable under Nebraska statutory law. The Arkansas court stated that [i]n determining whether transportation charges incurred in delivering goods to a buyer are subject to taxes, the factor having the most bearing is the passage of title to the goods from seller to buyer. (Emphasis supplied.) Pledger v. Simpson Press, Inc., 304 Ark. at 277, 801 S.W.2d at 45-46. As discussed, the 1985 amendments to Nebraska's sales and use tax provisions eliminated the distinction between transportation charges incurred before the sale versus transportation charges incurred after the sale. See 1985 Neb. Laws, L.B. 715. Simpson Press, Inc., does not add persuasive authority to Affiliated Foods' argument. When the cost of transportation is paid directly to Affiliated Foods, it is taxable. See §§ 77-2702.07(1)(c) and 77-2702.17(1)(c).