Sales Tax State Activity Update December 2005

Texas Takes a Look at Packaging Materials

The Texas Comptroller of Public Accounts denied a claim for refund of sales and use taxes paid on the purchases of wrapping and packaging supplies used to package tangible personal property. Texas Sales and Use Tax regulations provide an exemption for wrapping and packaging materials purchased by manufacturers to complete their manufacturing process.

The comptroller determined that the claimant did not engage in manufacturing activities, but merely re-packaged tiles manufactured by its parent company. The comptroller determined the purchases of wrapping and packaging supplies were properly taxable as those purchased by a retailer or wholesaler and used in re-packaging tangible personal property prior to sale for the purpose of delivering, expediting or furthering the sale.

View the full text on the Texas STAR System. (Note: To visit the STAR system you must have port 8765 open on your network firewall - contact your system administrator.) Decision of the Texas Comptroller of Public Accounts, Hearing No. 44,843, 9/14/05