Court Opinion

ID: 5833911
Source: CourtListenerOpinion
Date Created: 2022-01-12 22:32:49.798533+00
Date Added: 2024-06-11T08:43:32.391700
License: Public Domain

Staley, Jr., J. (dissenting in part and concurring in part).
We would affirm the judgment appealed from in all three proceedings. Special Term held that in Proceeding No. 1 the determination reviewed should be confirmed. We agree.
The main issue in Proceeding No. 1 is whether paper products purchased by it, such as wrappers for sandwiches, cups containing coffee, soda and other drinks, and sleeves for holding french fries and sold to its customers were not sales of tangible personal property for resale as such or as a physical component part of tangible property and, therefore, such sales to Burger King constituted "retail sales” in accordance with section 1101 (subd [b], par [4]) of the Tax Law.
The paper products purchased by Burger King and used to serve food and drink to its customers clearly do not become physical component parts of the food and drink which Burger *454King serves, and because they were not sold "as such”, such paper products were taxable to Burger King when purchased. Burger King is not in the business of selling paper products and it does not charge its customers separately for such paper products. Burger King purchases the paper products at retail for its own use and consumption in serving meals to its customers and not for resale "as such”. There can be no doubt in the present case that the paper products involved were not resold by the purchasers thereof and, accordingly, the sale to Burger King was a retail sale of the products (Matter of Colgate-Palmolive-Peet Co. v Joseph, 308 NY 333; Matter of Dairylea Coop. v State Tax Comm., 41 AD2d 312).
We agree with Special Term’s holding that (95 Misc 2d 442, 444-445): "When Burger King sold its food contained in the wrapper or container to a customer, the wrapper or container had no value apart from the food and is discardable as waste only as soon as the food is consumed. The customer does not separately buy the wrapper or container. Therefore, those items are used by Burger King ' "only to facilitate the sale of the product packed in the container and not for the purpose of resale of the container as an item of commerce” ’ (see Matter of Colgate-Palmolive-Peet Co. v Joseph, 308 NY 333, 338; Matter of American Molasses Co. v McGoldrick, 281 NY 269) and cannot be said to be sold by Burger King to the customer for resale so as to qualify for that exemption from the sales tax.”
The determination of the State Tax Commission in Proceeding No. 1 should be confirmed.
Mahoney, P. J., and Sweeney, J., concur with Mikoll, J.; Staley, Jr., and Kane, JJ., concur in part and dissent in part in a separate opinion by Staley, Jr., J.
Judgment modified, on the law, by reversing so much thereof as dismissed the petition in Proceeding No. 1, and by granting said petition, and annulling the determination of the State Tax Commission which sustained an assessment of sales taxes against petitioner Burger King, Inc., and, as so modified, affirmed, with one bill of costs to petitioners, and matter remitted to the State Tax Commission for further proceedings not inconsistent herewith.