@109 CHAP 11 @CODE: HI NM @CODE:EN 旼컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴� � SALES AND USE TAXES (IN GENERAL) � 읕컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴� The Three Golden Rules of Governance: 1. If it moves, tax it. 2. If it's big, regulate it. 3. If it's really huge, subsidize it. @CODE: OR AK MT NH DE @STATE doesn't impose a sales or use tax. Accordingly, the following general discussion of sales and use taxes will be of interest to your company based in @STATE only if you also operate in other states. ____________________________________________________________ @CODE:OF With a limited number of exceptions, every business that will sell tangible personal property (such as merchandise) to customers must obtain a seller's permit from the state sales tax agency. A separate permit may be necessary for each place of business where property subject to tax is sold. In many states, certain kinds of services are also subject to sales tax. @IF150xx]NOTE REGARDING @NAME: @IF150xx]------------------------------------------------------------ @IF150xx]Because you are in a retail business, your firm will need to @IF150xx]be cognizant of sales tax laws and regulations in each state @IF150xx]in which you do business, from day one. @IF150xx]------------------------------------------------------------ @IF150xx] In general, as a wholesaler (or manufacturer) you will not have to collect sales tax on goods you sell to a retailer for resale, if the retailer holds a valid seller's permit and provides you a "resale certificate" in connection with the transaction. Likewise, if your business, as a retail- er, buys goods for resale, you need not pay sales tax to the wholesalers if you provide them with resale certifi- cates. @IF151xx]@NAME is in the wholesale business. @IF151xx] @IF151xx]Accordingly, you need to be particularly familiar with the @IF151xx]sales tax rules and regulations in each state where your @IF151xx]firm does business; and particularly with regard to "resale @IF151xx]certificates." @IF151xx] While the sales tax generally applies to the sale or rental of tangible personal property (other than for resale) with- in the state, a "use tax" or compensating tax, applies to the storage, use or other consumption of such property pur- chased from a retailer for such storage, use or consumption. The use tax generally applies to purchases made OUTSIDE the state for use within the state. The use tax also applies, generally, when a retailer buys goods ex-tax (for resale), and instead uses or consumes some of the goods rather than selling them. Note that if you sell across state lines to customers in states where you have no offices, employees or other pres- ence, the sale is usually not subject to sales tax in ei- ther state, since it is an interstate sale. However, tech- nically, such sales are subject to "use tax" (which is sort of a "shadow" of the sales tax, which applies where the sales tax doesn't in most states) in the customer's state. The U.S. Supreme Court and other courts generally have not supported attempts of the various states to force out-of- state retailers to collect use tax on mail order or other sales made to residents of the taxing state, so that most mail order firms tend to treat such interstate sales as being tax-free, or tell the customers that it is up to them to report the purchase and pay the use tax (which they almost never do). However, in just the last few years, many states have en- acted new and broader sales and use tax laws that attempted to require out-of-state retailers who advertise in the local media or send substantial amounts of direct mail/catalog solicitations into the state to register as retailers sub- ject to sales or use tax in the state, treating such di- rect sales as taxable. Some states have aggressively en- forced these new laws, which would definitely begin to cramp the style of many mail order firms if these laws stand up in court. BOTTOM LINE: Don't assume that such interstate sales are still "sales tax-free," at least in many states. (A Tennessee law even imposes use tax on free mail order cat- alogs shipped into the state, whether or not any sale is made!) RECENT UPDATE: Just recently, the U.S. Supreme Court has ruled, in the case of Quill Corp. v. North Dakota (1992), that a state may not force out-of-state mail order retail- ers to collect use tax on sales to residents of the state, where the company had no presence in the state, under the U.S. Constitution. Thus, it appears that many of the broad new mail order use tax laws, targeted to hit mail order firms, which have been adopted in some 34 states in recent years, are now invalid. While this is good news for mail order retailers, the bad news is that the court also indi- cated in its decision that Congress could, if it chooses to do so, constitutionally enact legislation that would permit the states to require use tax collection on mail order and similar sales by out-of-state retailers. Expect something along these lines to be passed in the next year or two, now that the November, 1992 election is behind us. But at least, if a federal law authorizing such use tax col- lections is enacted, it is likely to provide some exemption for smaller retailers and a simplified, state-wide tax rate and payment method for sellers with only minimal sales in each of a number of states. Or so we fervently hope.... (Otherwise, small mail order sellers like yours truly will instantly be forced out of business, due to the impossible complexity and cost of filing sales or use tax returns for every state and local taxing district where a sale is made! @CODE: CA 旼컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴커 � CALIFORNIA SALES AND USE TAX LAW � 읕컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴켸 California requires virtually every business that will sell tangible personal property (even wholesalers) to obtain a seller's permit from the state Board of Equalization office nearest the place of business. A separate permit is re- quired for each place of business where goods subject to tax are sold. To obtain a permit, it is necessary to sub- mit a completed registration form, Form BT-400 or BT-403. There is no fee for obtaining a permit, but you may be re- quired to post a bond as security for payment of tax. However, the State Board of Equalization has recently dropped the requirement that most new businesses regis- tering for the sales tax post a deposit (except for re- tailers who have established a poor record of paying sales tax to the state). In the past, most new businesses in California were required to post a bond or deposit to- talling 3 times their estimated monthly sales tax col- lection (up to $10,000). Dropping this requirement is in- tended to lower one barrier to the creation of new small businesses. Sales tax rates in California range from 7.25% in most ru- ral counties to as high as 8.25% in some of the urban coun- ties, such as Alameda and Santa Clara counties, and San Francisco voters approved an additional 0.25% sales tax in- crease, effective February 1, 1992, expiring on June 30, 1993. This raised the sales tax rate until 6-30-93 to 8.5% in San Francisco (City and County), the highest in the state of California. San Francisco voters, in a special election held on June 15, 1993, voted to extend the 0.25% permanently, but only if the 0.5% temporary statewide sales tax expired June 30, 1993, or if the legislature changes state law to allow San Francisco to permit the additional 0.25% tax (in which case the total rate would remain at 8.5% in San Francisco after June 30, 1993). Numerous types of transactions and categories of property are exempt from the tax. Perhaps the main type of exempt property is food (although this exemption does not apply to restaurant sales or to liquor). One-half of one percent of the current state wide sales tax rate (after July 15, 1991) is theoretically "temporary," but we suggest that not hold your breath waiting for this temporary tax to expire on June 30, 1993, in view of the state government's critical fiscal condition. A bill has passed the state legislature in June, 1993, to extend (to December 31, 1993) the state- wide 1/2% tax that was due to expire June 30, 1993. The bill is awaiting action by Governor Wilson, to either sign or veto it. California sales and use tax returns usually must be filed and tax paid within one month after the end of each calen- dar quarter, although larger businesses may be required to make more frequent payments of tax. @CODE:EN (NOTE: Not every state has a sales and use tax law. Oregon, Montana, Alaska, Delaware and New Hampshire do not. However, there is a sales tax in @STATE.) @CODE: DC The general sales and use tax rate in D.C. is 6% of retail sales for sales or rentals, or for storage, use or consump- tion of tangible personal property, including prepared food and drink and materials used to repair or alter real property. In addition there are special sales tax rates that apply to transient accommodations, prepared food and drink, alcoholic drinks sold for on-premises use, and for rental vehicles and trailers. D.C. sales tax also applies to certain services, including: . The production, fabrication, or printing of tangible personal property on special order; . fuel and utility services; . repairing, altering, or fitting tangible personal property, or applying and installing same as repair or replacement parts of other tangible personal property; . duplicating, copying, addressing and mailing services, and public stenographic services; . commercial textile rentals that include recurring laundering or cleaning service; . real property maintenance and landscaping services; . data processing and information services; . parking, storing or keeping motor vehicles or trailers; and . local telephone service. Persons selling taxable property or services at retail and persons buying taxable property for resale or other nontax- able purposes are required to first obtain a certificate of registration from the Department of Finance and Revenue. @CODE:EN @CODE: LS 300 percent. Take it or leave it. @CODE:EN The general statewide sales/use tax rate in @STATE is: @CODE: CO 3 percent. Denver has a 3.5% sales and use tax rate, plus a 0.6% Regional Transportation District Sales Tax. While city and county sales and use taxes are generally collected by the state, you must report and remit local taxes to Denver and other "home rule" cities. Sellers must register to obtain a Colorado sales tax li- cense, for which there is a $16 fee (which must be renewed every 2 years), plus a $50 tax prepayment or deposit. @CODE:OF @CODE: WY 4 percent, effective July 1, 1993 (formerly, 3%). The rate is scheduled to revert to 3% on July 1, 1996. Wyoming coun- ties impose sales and use taxes at 1% or 2% (administered by the state) on retail sales of tangible personal property, admissions and services, and counties or localities within counties are also authorized to levy an extra 1% or 2% lod- ging tax. Vendors must register and obtain a sales tax license in order to do business in Wyoming, and are required to make a tax prepayment of $150 at such time. @CODE:OF @CODE: VA 3.5 percent. In addition, every county and city levies a 1% local sales and use tax, administered and collected by the State Department of Taxation along with the state sales and use tax. Sellers must obtain a certificate of registration from the Tax Commissioner in order to engage in a taxable business, one for each place of business. There is no fee for the registration. @CODE:OF @CODE: AL GA LA MI NY NC SD 4 percent. @CODE:OF @CODE: AL Many Alabama counties, cities and towns also impose sales and use taxes, most of which are collected along with the state sales tax. Sellers must obtain an annual sales tax license (no fee) from the Department of Revenue. Alabama is the only state which exempts "canned" (non- custom, off-the-shelf) computer software from sales tax. @CODE:OF @CODE: GA Counties and cities in Georgia impose a 1% local-option sales and use tax, and counties can also adopt a 1% Special County Sales-Use Tax. In addition, in the Atlanta area, Fulton and DeKalb Counties levy a 1% rapid transit district sales and use tax. Retailers must apply to the State Revenue Commissioner for a certificate of registration for each place of business in Georgia. There is no fee for registration. @CODE:OF @CODE: LA In addition, local sales taxes are imposed at the parish and municipality levels, and by school boards, at rates up to 4% (5% in New Orleans), which is added to the state sales tax. There is also a 10% tax on hotel and motel room rentals in the city of New Orleans. Sellers and auctioneers are required to register with the Department of Revenue and Taxation. @CODE:OF @CODE: MI In a special election held June 2, 1993, Michigan voters decided NOT to increase the state sales and use tax rate from 4% to 6%. There are no local sales taxes in Michigan. However, in addition to the state sales tax, Michigan also imposes a 2.35% value-added tax, misnamed the "Single Business Tax" (since there are also sales and use taxes, property taxes, an individual income tax, and other taxes on businesses in the state of Michigan). The value-added tax, which applies to all but relatively small businesses, is sort of a cross between an income tax and a sales tax, with many deductions allowed, except for some of the more important ones, like wages and interest expense. Sellers must register for a sales tax license with the Revenue Division of the Michigan Department of Treasury. Licenses expire annually on June 30 and can be renewed for a $1.00 fee. @CODE:OF @CODE: NY Localities are also allowed to impose sales and use taxes of 1% to 3% (4% in some areas). The total rate in New York City is 8.25%, consisting of the 4% state rate, a 4% local tax, and a 1/4% Metropolitan Transit tax. Sellers are required to register and obtain sales tax cer- tificates of authority from the Department of Taxation and finance within 20 days of starting business, generally. Sellers are generally required to file quarterly sales tax returns (Form ST-100), and monthly returns (for the first 2 months of each quarter, on Form ST-810) if taxable gross re- ceipts were $300,000 or more in any of the four preceding quarters. Permission to file annual returns only (Form ST-101) may be granted for some firms with under $250 tax liability. @CODE:OF @CODE: NC Various classes of taxable items are subject to tax at re- duced rates of 1%, 2% or 3%, and most such items are fully exempted from the 1% local option (county) sales taxes. Certain of such items also have a maximum sales tax amount per item, such as $80 on certain farm equipment. Sellers are required to register with the Sales and Use Tax Division of the State Department of Revenue and obtain a sales tax identification number. @CODE:OF @CODE: SD The South Dakota sales tax is quite broad, as it applies to gross receipts from most kinds of service businesses, ex- cept certain exempted services, such as health and educa- tional services. (Wages paid to an employee are also exempt.) Sales tax also applies to sectional homes, which are pre- built homes for placement on foundations, not mobile homes. While the general state sales tax rate is 4%, a 3% rate applies to farm machinery and irrigation equipment, oil and gas field services, and gross receipts from amusement de- vices. A 2% tax applies to gross receipts of contractors engaged in real estate improvement contracts, in addition to the retail sales tax. In addition to the state sales tax, cities and towns can impose local sales taxes of up to 2%, and a number of cities also impose lodging taxes at rates of 2% to 3%. A seller is required to obtain a sales tax permit from the Department of Revenue for each place of business. No fee is charged for the permit. @CODE:OF @CODE: MO 4.225 percent (plus a local use tax of 1.5%, making the total use tax rate 5.725% after June 30, 1992 -- Missouri is the only state with a use tax rate that differs from the sales tax rate). A number of Missouri cities and counties also have local sales taxes. City rates are generally 1%, while county rates are mostly 1/2%. The local taxes are also collected and administered by the Missouri Department of Revenue. Persons responsible for collecting the sales tax must reg- ister for a retail sales tax license with the Department of Revenue. There is no registration fee, but a bond must be posted. Anyone purchasing a business must notify the Department of Revenue, and must obtain a Certificate of No Tax Due from the seller, or withhold any such tax as is due from the purchase price of the business. @CODE:OF @CODE: KS 4.9 percent, effective June 1, 1992. Many cities and counties also impose sales taxes of 1/2 or 1%, which are administered and collected along with the state sales tax by the Kansas Department of Revenue. The tax applies to a number of kinds of services, including drycleaners, laund- ries, carwashes, cable and other subscriber radio and TV services. Retailers and persons selling taxable services are required to obtain a sales tax registration certificate for each place of business. No fee is charged for the certificates, which must be displayed at your place of business. @CODE:OF @CODE: AR 4.5 percent. Arkansas voters will decide in the November, 1994 election on an increase in the sales and use tax rate to 4.625%, which, if approved, would go into effect on July 1, 1995. The state also allows city and county governments to levy sales and use taxes at a 1% rate (2% in a few localities). The local sales taxes are generally collected with the state tax, by the Arkansas State Department of Finance and Administration. Certain border cities that are divided by the state line are permitted to impose an additional 1% sales tax. Recent (December, 1992) Arkansas tax legislation has great- ly expanded the sales tax, to cover a wide range of previ- ously nontaxable services, such as cleaning or janitorial work, pool services, lawn care, landscaping, auto parking and storage, and others, beginning March 1, 1993. Businesses that are required to collect sales tax must ob- tain a Gross Receipts Permit from the Commissioner of Revenue, in order to do business in Arkansas. A separate permit is required for each location, and a $250 deposit is required. @CODE:OF @CODE: OK 4.5 percent. Cities and counties also impose sales and use taxes, which are collected by the State Tax Commission. Most vendors, other than those who only occasionally make sales subject to tax, or who are located outside the state but solicit sales in Oklahoma via newpaper or radio/TV advertising or mail order, are required to obtain a sales tax permit from the State Tax Commission. A separate permit is required for each place of business. The cost of the first permit is $20 and each additional one costs $10. All such permits expire after 3 years @CODE:OF @CODE: AZ ID IN NB ND OH SC MD MA UT WS 5 percent. @CODE:OF @CODE: UT In addition, Utah localities impose a 1% local sales/use tax. Utah sales tax applies to retail sales of tangible personal property and also to certain services, such as repairs, re- novations, cleaning or washing of tangible personal property or installing tangible personal property in connection with other such property, as well as to laundry and dry cleaning services and certain utility services. The Utah State Tax Commission administers the sales and use taxes. Wholesalers or persons required to collect sales tax must first obtain a sales tax license from the Tax Commission before engaging in business in Utah, and a separate license is required for each place of business. Use tax registra- tion is required for retailers who sell tangible personal property for storage, use or other consumption in Utah and must provide detailed information on their activities within the state to the Tax Commission. @CODE:OF @CODE: AZ Many Arizona towns and cities impose local sales taxes, which are also collected by the State Department of Revenue, along with the state sales tax (known as the transaction privilege tax). In addition to taxing retail sales of tangible personal property, Arizona also imposes the trans- action privilege tax on certain activities that would not usually be subject to sales tax in other states, such as commercial lease rents, job printing, and owner-builder sales of improved real property. Persons subject to the tax, including landlords and sellers of tangible personal property, must register and obtain a privilege license before engaging in business. Licenses are obtained from the Department of Revenue, and a $12 fee must accompany the application form. A separate license is required for each place of business, and the state may re- quire applicants to post a surety bond in order to obtain the license. @CODE:OF @CODE: ID There are generally no local sales taxes in the state, but certain resort cities have limited authority to adopt local sales taxes to finance tourist development. Anyone who wishes to engage in business as a seller within the state of Idaho must file with the Idaho Tax Commission an application for a seller's permit. A separate permit is required for each place of business. There is no charge for the issuance of sellers' permits. Any person who makes 2 or more retail sales during any 12 month period is considered a "retailer" under Idaho law, and is required to collect the sales and use tax from customers. @CODE:OF @CODE: OH Recent Ohio legislation has extended the scope of the sales tax (effective in 1993) to include the following services: . building maintenance and janitorial services; . employment services and employment placement services; . exterminating services; and . physical fitness facility services and recreation and sports club services. @CODE:OF @CODE: VT 5 percent until June 30, 1993, 4% thereafter. @CODE:OF @CODE: IA 5 percent, effective July 1, 1992 (4% previously). @CODE:OF @CODE: TN 6 percent. Tennessee has also recently enacted a separate tax on certain types of services, of 6.75%, repealing the sales tax on such services. @CODE:OF @CODE: FL 6 percent. Effective since September 1, 1992, the sales tax is also imposed on detective, burglar protection and other protective services, and on nonresidential cleaning and pest control services. The sales tax also applies to certain rentals of real estate, with a number of major ex- emptions, including rental of residences. Florida law imposes a sales tax on mail order sales, but the state's ability to enforce this law is doubtful, in light of the Supreme Court's recent decision in the case of Quill Corp. v. North Dakota (1992). Counties in Florida may impose local transit taxes and con- vention and tourist development taxes on hotel accommoda- tions, and may also adopt local sales taxes for specified periods. Cities and towns also are authorized to impose municipal resort taxes. Local taxes generally range from 1 to 3 percent, in addition to the statewide tax of 6% Sales and use taxes are administered by the Florida Depart- ment of Revenue. Persons engaging in a business subject to tax must apply to the Department of Revenue for a certifi- cate of registration for each place of business, for a fee of $5. An additional fee of $25 or $50 applies if the prior year's sales or purchases were over $30,000 or $200,000, respectively. Sales tax returns are due monthly, by the 20th day of the month. (Quarterly or semi-annual filing may be permitted for small firms, where the tax remitted for the last quarter or past 6 months wasn't in excess of $100 or $200, respectively.) @CODE:OF @CODE: CT KY WV PA 6 percent. @CODE:OF @CODE: PA The Pennsylvania sales and use tax, administered by the state's Department of Revenue, generally applies not only to sales of tangible personal property, but also to intra- state communications, restaurant meals, hotel occupancy, food sold through vending machines, and certain kinds of specified services relating to tangible personal property. Taxable services include (among others): . lobbying; . collection and credit reporting services; . pest control and building maintenance services; . employment services; . secretarial or editing services; . computer-related services, including programming; and . lawn care. There are no local sales or use taxes in Pennsylvania. Persons who maintain a place of business in the state and who sell or lease items subject to tax are required to ob- tain a sales tax license from the Pennsylvania Department of Revenue before beginning business. A license is issued for the principal place of business, if a seller has more than one place of business in Pennsylvania. Sales tax returns are due monthly, by the 20th day of the following month, for sellers whose tax was $600 or more for the third quarter of the preceding year. Smaller firms may file quarterly, semi-annual, or annual returns. @CODE:OF @CODE: ME 6 percent (dropping to 5%, effective July 1, 1993). @CODE:OF @CODE: MN 6 percent (after temporarily being 6.5% between July 1, 1991 and December 31, 1991). @CODE:OF @CODE: IL 6.25%. The Illinois sales and use taxes include a service occupation tax. While services, per se, are not taxable, service persons are liable for tax on any tangible personal property that is transferred as an incident to the retail sale of services by such persons. In general, if the mer- chandise transferred to customers is under 35% of total receipts from the sale of services, the service person can continue to pay sales tax to his or her suppliers, and need not register as a retailer nor pay the tax directly to the state. If the merchandise is 35% or more of total receipts from sales of services, the service person can buy the merchandise from suppliers tax-free (for resale), but must register and pay (and collect) sales tax on the merchandise transferred to customers incidental to its services. Sales tax applies to the rental of automobiles, but generally not to other leased property, unlike nearly all other states. Food sold for off-premises consumption and prescription drugs are taxed at a reduced tax rate of 1%. Local sales and use taxes are also imposed, and are collec- ted by the Department of Revenue along with the state tax. Some localities impose a hotel operators' occupation tax, as well. Retailers and service persons required to register as sel- lers must do so and post a bond or other security in an amount set by the Illinois Department of Revenue. There is no charge for the registration certificate. @CODE:OF @CODE: TX 6.25%. The Texas sales tax applies not only to sales of tangible personal property, but also to a wide range of services, including amusements, cable TV, various personal services, vehicle parking, repairs services, debt collec- tion, credit reporting, telecommunications, information services, and real property services such as landscaping, lawn care, janitorial and structural pest control services. A number of Texas cities also impose local sales and use tax, in addition to the special sales taxes that are col- lected in certain metropolitan transit areas to finance mass transit. All of the foregoing state and local sales and use taxes are administered by the Texas Comptroller of Public Accounts. Any person wishing to do business as a seller in Texas must file an application for a sales tax permit with the Comptrol- ler. A permit is required for each place of business. No charge is made for obtaining a permit. In general, although certain occasional or "casual" sales may be exempt from sales tax, anyone who makes two or more sales of taxable items in a 12-month period is considered a "seller" and must collect sales tax. @CODE:OF @CODE: NV 5.75% (6.5%, effective October 1, 1991). @CODE:OF @CODE: WA 6.5% (8.2%, counting local taxes, in the Seattle area). At present, the Washington sales and use tax applies mainly to retail sales or leases of tangible personal property, food and drink, amusements and entertainment, room rentals, and to certain services. ------------------------------------------------------------ CAUTION: Due to the state's budget crunch, the state legis- lature, in June, 1993, has passed new legislation expanding the coverage of the Washington sales tax to a wider range of services. Thus the following discussion may already be out of date by the time you read this. For example, the sales tax would be extended to numerous new service occupa- tions, such as landscape and horticultural maintenance, massage services, physical fitness services, and dating services, to name a few, effective July 1, 1993, if the bill is signed into law by Governor Lowry. ------------------------------------------------------------ Services that are currently taxable include: . any kind of charge for cleaning, repairing, altering, improving, installing or imprinting tangible personal property of or for consumers; . cleaning, fumigating, demolishing, or moving buildings (but not janitorial services); . constructing, repairing, decorating or improving buildings; . miscellaneous services such as credit reporting, ab- stract title insurance, and auto storage or parking; . telephone services; and . various other kinds of services. Cities and counties in Washington impose uniformly adminis- tered local sales taxes that vary by locality. King County also levies a special excise tax on lodgings, except for facilities with less than 60 units or for continuous occu- pancy of one month or more. The lodgings tax rate is 6% in Seattle, 5.4% in Bellevue, and 2.4% elsewhere in King County. Other counties are also authorized to levy such a tax. Every person who engages in business in Washington as a sel- ler is required to register with the Department of Revenue and to pay a registration fee of $15. The certificate of registration remains valid so long as you stay in the busi- ness and pay tax to the state. @CODE:OF @CODE: MS 7 percent. @CODE:OF @CODE: NJ 6%, a decrease from the 7% rate that applied until July 1, 1992. Atlantic City has a combined city and state tax rate on certain items, such as room rentals, alcohol sold by the drink, cover charges, beach equipment and admissions, that can't exceed 12%. Otherwise, local sales and use taxes are not generally imposed. Advertising services are subject to sales tax, although most other kinds of services are not. Sales taxes are collected and administered by the Division of Taxation in the New Jersey Department of Treasury. All vendors are required to register with the Division of Taxation within three days of starting a business, and must obtain a Certificate of Authority (form ST-2) for each place of business. Applications for registration must be filed on form CIS 1. No fee is charged. @CODE:OF @CODE: RI 7 percent. (A scheduled reduction of this rate in 1991 and 1992 was repealed.) A 5% additional tax applies to tran- sient room rentals. @CODE:OF @CODE: AL AZ AR CO CT FL GA ID IL IN IA KS KY LA ME MD MA MI MN MS MO NB NV NJ NY NC ND OH OK PA RI SC SD TN TX UT VT VA WA WV WS WY @CODE:NF Some of the major categories of goods and services that are subject to sales or use tax in @STATE include: . sales of tangible personal property sold at retail; @CODE:OF @CODE: AR NC OK . most sales of food, unlike most other states, which generally exempt food other than restaurant meals; @CODE:OF @CODE: CO WY VA IL NJ . furnishing, preparing or serving food on the premises, for on-premises consumption; @CODE:OF @CODE: NJ . certain sales of prepared food for OFF-premises consump- tion; @CODE:OF @CODE: AL GA MI NY SD AZ FL PA . sales of prepared food or drink for on- OR off-premises consumption; @CODE:OF @CODE: MO KS ID . meals and drinks furnished by restaurants, hotels, dining cars and other places where meals or drinks are regularly served; @CODE:OF @CODE: TX WA . food sold by restaurants, concession stands and other vendors for "immediate consumption"; @CODE:OF @CODE: CO WY GA MI NY SD MO KS AR OK AZ UT . utility services, including gas, and electricity; @CODE:OF @CODE: CO WY GA MI NY SD MO KS AR OK AZ FL NJ TX PA WA UT . certain telephone services; @CODE:OF @CODE: WY GA LA NY SD MO KS AR OK AZ FL NJ ID TX WA UT . admissions to places of amusement, recreation, games or athletic events, generally; @CODE:OF @CODE: WY SD AR TX . computer software programs, whether of the "canned" variety or if customized for the user; @CODE:OF @CODE: LA SD TX WA . various services, such as laundry, drycleaning, print- ing and repair services; @CODE:OF @CODE: WY MO OK AZ UT . receipts from transportation of passengers; @CODE:OF @CODE: CO WY VA AL GA LA MI NY NC SD MO KS AR OK AZ IL FL NJ ID TX PA WA UT . gross receipts from providing transient accommodations; @CODE:OF @CODE: VA NY NC AZ FL ID TX . fabrication of tangible personal property for consumers who furnish the property; @CODE:OF @CODE: WY KS AR NJ TX PA WA . services relating to repair, alteration, or improvement of tangible personal property; @CODE:OF @CODE: CO WY VA AL GA LA MI NY NC SD MO KS AR OK AZ FL NJ ID TX PA UT . and rentals and leases of tangible personal property. @CODE:OF @CODE: AL AR CO CT FL GA ID IL IN IA KS KY LA ME MD MA MI MN MS MO NB NV NJ NY NC ND OH OK PA RI SC SD TN TX UT VA VT WV WS WY Major categories of goods or services that are exempt from sales tax in @STATE include: . sales to the U.S. or the state of @STATE; @CODE:OF @CODE: AZ WA Major categories of goods or services that are exempt from sales tax in @STATE include: . sales made to the U.S. government (but not to the state of @STATE); @CODE:OF @CODE: CO WY VA AL GA LA MI NY NC SD MO KS AR OK AZ IL FL NJ ID TX PA UT . sales to certain charitable, educational or nonprofit organizations; @CODE:OF @CODE: CO WY VA AL GA LA MI NY NC SD MO KS AR OK AZ FL NJ ID TX WA UT . sales of most kinds of prescription medicines and drugs; @CODE:OF @CODE: PA . sales of prescription AND non-prescription drugs, medi- cines and medical supplies; @CODE:OF @CODE: VA . non prescription drugs and proprietary medicines used in the cure, prevention or treatment of disease will also become exempt, effective July 1, 1994; @CODE: OF @CODE: CO WY VA LA MI NY NC SD MO KS AR OK AZ FL NJ ID TX PA WA . sales of certain kinds of medical items, such as pros- thetic devices; @CODE:OF @CODE: CO WY VA LA MI NY SD AR OR FL NJ TX PA WA UT . newspapers; @CODE:OF @CODE: CO WY VA AL NY KS FL NJ WA UT . most kinds of services, where not related to repair, installation, fabrication, etc., of items of tangible property; @CODE:OF @CODE: GA MI NC MO OK AZ IL ID PA . personal services, in general; @CODE:OF @CODE: CO VA AL MI NY NC MO KS AZ IL FL NJ ID PA WA UT . sales of customized computer software programs; @CODE: CO WY VA AL GA LA MI NY NC SD MO KS AR OK AZ IL FL NJ ID TX PA WA UT . and sales made for resale (wholesale sales), pursuant to a valid resale certificate. @CODE:OF