Laws, Regulations and Annotations

Search

Business Taxes Law Guide—Revision 2024

Sales and Use Tax Annotations


A    B    C    D    E    F    G    H    I    J    L    M    N    O    P    R    S    T    U    V    W    X   


G


295.0000 Gross Receipts

Annotation 295.0325

(a) General

295.0325 Hostess Premiums. A company's brochure pictorializes to the hostess the merchandise that can be earned under the various premium awarding categories. Each item of merchandise has a dollar value printed under its picture. The majority of the premiums are also available for purchase through the customer catalogue at the same amount as the premium is valued to the hostess. There is no other written or oral agreement between the parties regarding the valuation of the premium. The sales representative earns an average 35% commission on all orders taken.

The measure of tax for sales of premiums by the company in exchange for classes or sales parties provided by the hostesses is the value of the service performed by the hostess in exchange for the various items sold by the company to the hostess. The premium catalog which the company provides to prospective hostesses lists the various premiums available to the hostess for giving classes, and the catalog designates a dollar value for each premium. The catalog value generally equates to the company's retail price of the product. Absent any express agreement as to the value of the services provided by the hostess, the stated values of the premiums represent the value of the services as arrived at by the free negotiation of the parties. 5/6/86.