12A-1.040 Sales of Containers, Wrapping and Packing Materials and Related Products.
(1) Items actually accompanying the product sold to the final buyer or ultimate consumer without which delivery of the product is impracticable on account of the character of the contents and for which there is no separate charge are exempt. These items include such things as cans in which canned goods, paints and other commodities are contained, medicine bottles, boxes in which jewelry, candy, suits, dresses and hats are delivered to customers, wrapping paper, paper bags, ice cream cartons and ice cream cones, twine, milk bottle caps, paper discs, meat skewers, etc., crating, packing cases, excelsior, bail bindings, bulkhead materials and the like when used in connection with the packaging for shipment for sale of other tangible personal property where these materials pass to the retailer or ultimate consumer together with the tangible personal property originally containing only directions for use when it accompanies the article sold and where it is impracticable to affix such printed matter to the article sold.
(2) Whenever tangible personal property is sold in barrels, bottles, boxes, bags, kegs, drums, cartons, sacks, cans or other containers, the title to which containers is retained by the seller of the tangible personal property contained therein and which containers are to be returned to the seller and are intended by the seller to provide merely a means of containing such tangible personal property while in process of being delivered or conveyed to the purchaser for use or consumption, then a person so using such containers in the conduct of his business is a purchaser for use or consumption and the sale to him is a sale at retail and is taxable.
(3) Paper and plastic coated plates, paper napkins, paper cups, butter chips, paper tops for individual creamers, paper covers for fruit juice glasses, souffle cups, hamburger and frankfurter holders, straws, wooden and plastic spoons and forks are exempt when sold to a purchaser for use in connection with the operation of a restaurant, drugstore, cafeteria or similar business licensed by the Division of Hotels and Restaurants of the Department of Business and Professional Regulation. Purchases by these establishments of the following items are taxable: Toothpicks, doilies, placemats, chicken baskets, burgerbaskets, guest checks, menus, paper mats, towels, toilet tissue, toothpick frills, chop holders, aluminum foil for baking and serving potatoes and leftover bags furnished by restaurants.
(4) Sales of boxes, wrapping paper, twine, tape and similar articles to persons who use such material in connection with services rendered and who are not required to collect the tax upon the receipts from such services are sales at retail and are taxable. To illustrate: Sales of wrapping paper and twine to a dry cleaner or laundry must be taxed by the seller since the dry cleaner or laundry does not make sales at retail and does not purchase the wrapping paper and twine for resale but for consumption.
(5) Containers, sacks or bags used more than one time for packaging tangible personal property for shipment for sale are taxable.
(6) The charge a store makes for gift wrapping the merchandise it sells is taxable.
(7) Paper bags furnished free of charge to customers for use in carrying out their purchases are exempt when purchased by a store.
(8) Egg crates, egg cartons and other containers used for the purpose of shipping and transporting eggs to the consumer for final purchase are exempt. This rule applies to used as well as new containers.
(9) Skewers used by butchers and meat shops are exempt.
(10) Price tags which accompany the article sold to the ultimate consumer are exempt. Price tags which are retained by the merchant are taxable.
(11) Coat hangers used on display racks in stores are items of store equipment and are taxable. Coat hangers and garment covers used for the delivery of clothing to the customer and for which no extra charge is made are exempt.
(12) Milk cans used by dairies for shipping milk to purchasers are containers used more than one time for packaging tangible personal property for shipment for sale and are fully taxable.
(13) Shipping labels used on packages of merchandise purchased by customers carrying instructions such as “Do Not Crush”, “This Side Up”, “Fragile”, etc., and also those used for showing the customer’s name and address are exempt.
(14) Steak markers use to indicate the extent to which meat is cooked, such as rare, medium, etc., are removed as the meat is served. They do not become a part of the meal and are taxable under this rule.
(15) Plastic stir sticks sold to bars for one time use only and included in the price of the drink are exempt.
(16) The sale of containers which are suitable for more than one time use is taxable. Therefore, if a sales invoice covering both tax exempt merchandise and reusable containers shows a separate charge for the containers, only the charge for the containers is taxable; otherwise, tax is based on the fair retail value of the containers and should be collected at the time of sale.