ALABAMA DEPARTMENT OF REVENUE
SALES, USE & BUSINESS TAX DIVISION
SALES & USE TAX RULE
810-6-1-.69. Containers, Components of Containers, Labels, Pallets, and
Shipping Supplies.
(1) The term "label" as used in Sections 40-23-1(a)(9)b, 40-23-1(a)(9)c, 40-23-60(4)b,
and 40-23-60(4)c, Code of Alabama 1975, and in this rule shall mean a tag or sticker of
any material imprinted with information. The term "label" includes price stickers, address
stickers, and shipping tags as well as those tags or stickers which identify or describe the
property to which they are attached.
(2) The term "components of containers" as used in this rule shall include partitions, cellophane,
tissue paper, excelsior, gummed tape, scotch tape, glue, steel straps, twine, string, wire staples,
wax paper, and wrapping paper which are used in and on containers to shape, form, preserve,
stabilize, or protect the contents of the containers and which accompany the container and the
container's contents upon shipment and delivery to the customer.
(3) The term "container" as used in this rule shall mean articles in or on which tangible personal
property is placed for shipment and delivery to the purchaser. Containers include bags, barrels,
baskets, bottles, boxes, cans, cartons, cores, crates, cups, cylinders, drums, kegs, pails, plates,
reels, sacks, and spools.
(4) Containers purchased by manufacturers or compounders for use in packaging products
manufactured or compounded by them for sale, including the components of the containers, are
not subject to sales or use tax where the containers are passed on to the purchaser of the products
contained therein with no intention on the part of either the purchaser or the seller to return the
containers or have them returned for reuse. (Sections 40-23-1(a)(9)b and 40-23-60(4)b)
- (a) This exclusion for manufacturers and compounders may apply to both inner and outer
containers. Accordingly, when manufacturers or compounders place their manufactured or
compounded products in cans or bottles and place the cans or bottles in fiber boxes for shipment
to the customer; the cans or bottles and the fiber box qualify for the exclusion if both are intended
for one-time use. Alabama-Georgia Syrup Co. v. State, 253 Ala. 49, 42 So. 2d 796 (1949).
- (b) Containers, when purchased by manufacturers or compounders for use in purchasing and
storing product ingredients prior to using them as ingredients in the manufacturing or
compounding process and not purchased for use as one-time-use containers for shipping the
manufactured or compounded product to customers, do not qualify for the exclusion.
Alabama-Georgia Syrup Co. v. State, 253 Ala. 49, 42 So. 2d 796 (1949).
(5) Containers purchased by retailers for use in packaging products for sale, including the
components of the containers, are not subject to sales or use tax where the containers are
passed on to the purchaser of the products contained therein with no intention on the part of
either the purchaser or the seller to return the containers or have them returned for reuse.
(Sections 40-23-1(a)(9)c and 40-23-60(4)c)
(6) Containers and other packaging materials or supplies which are used or consumed in rendering
nontaxable services are taxable when purchased by the person who performs the service even
when the containers, materials, or supplies are transferred to the purchaser's customer. For
example, the operator of a laundry or dry-cleaning establishment is the user or consumer of
laundry bags, garment bags, and other packaging materials or supplies and must remit sales or use
tax on purchases of these items even though the bags, materials, or supplies may be transferred to
the operator's customer.
(7) Unless excluded by statute, containers, including the components of the containers, which are
intended to be returned or repurchased for reuse are subject to sales or use tax. Sales of the
following items are specifically excluded from sales or use tax regardless of whether there is an
intent on the part of the purchaser or the purchaser's customer to return the containers or have
them returned for reuse:
- (a) Sales of containers to persons engaged in selling, supplying, or furnishing baby chicks to
growers where the containers are for use in the delivery of the baby chicks to the grower.
(Sections 40-23-1(a)(9)f and 40-23-60(4)f)
- (b) Sales of egg crates and egg cartons to egg producers for use in the delivery of eggs to
distributors or packers. (Sections 40-23-1-(a)(9)f and 40-23-60(4)f)
- (c) Sales of bagging and ties for use in preparing cotton for market. (Sections 40-23-1(a)(9)g and
40-23-60(4)g)
- (d) Sales of wrapping paper and other wrapping materials to producers, processors, packers, or
wholesale or retail sellers of poultry or poultry products for use in preparing poultry or poultry
products for delivery, shipment, or sale. This exemption includes (i) pallets used in shipping
poultry and eggs, (ii) paper, and (iii) other materials used to line boxes or other containers in
which poultry or poultry products are packed together with any other materials including ice
placed in the containers for the delivery, shipment, or sale of poultry or poultry products.
(Sections 40-23-4(a)(20) and 40-23-62(21))
(8) Labels are purchased at wholesale, tax-free when (i) the label is purchased by a
manufacturer or compounder and affixed to the tangible personal property or product which
the manufacturer or compounder manufactures or compounds for sale or to the furnished container
thereof or (ii) the label is purchased to be affixed to one-time-use containers that are
purchased without contents and sold or furnished to the purchaser's customer along with the
contents placed therein or thereon for sale. (Sections 40-23-1(a)(9)b, 40-23-1(a)9c,
40-23-60(4)b, and 40-23-60(4)c)
(9) Pallets purchased without contents by persons who sell or furnish the pallets along with
the contents placed on the pallets for sale are excluded from sales or use tax where the
pallets are passed on to the purchaser of the products contained thereon with no intention on
the part of either the purchaser or the seller to return the pallets or have them returned for
reuse. (Sections 40-23-1(a)(9)d and 40-23-60(4)d).
(10) Crowns, caps, and tops sold to manufacturers or compounders for use upon containers in
which the manufacturer or compounder markets its products are excluded from sales or use tax
when the crowns, caps, or tops are intended for one-time use only. (Sections 40-23-1(a)(9)e and
40-23-60(4)e)
(11) Except for supplies which qualify for the exemptions contained in Sections
40-23-4(a)(10), 40-23-4(a)(40), 40-23-4(a)(42)c, 40-23-62(12), 40-23-62(32), and 40-23-62(34)c,
shipping supplies such as nails, lumber, metal straps, dunnage, and plates which are used for
fastening or securing manufactured or compounded products into railroad cars, trucks, aircraft,
or vessels for shipment are taxable at the time of purchase.
(12) Purchases by retailers, wholesalers, and others of sales tickets, cash register receipt
paper, invoice forms, bill of lading forms, and other forms for use in receipting, billing,
invoicing, or shipping are taxable.
(13) The following are examples of items sold by suppliers to certain retailers or service
providers with notations as to whether the item qualifies as a nontaxable one-time-use
container:
(a) RETAIL FOOD STORES (GROCERY & MEAT MARKETS):
| Adding Machine Tape |
T |
Meat Interleaver |
NT |
| Bags and Sacks |
NT |
Paper Cans |
NT |
| Bag Holders |
T |
Paper Cutters |
T |
| Brooms - Use |
T |
Parchment |
NT |
| Broom Holders & Display Racks |
T |
Patty Paper |
NT |
| Butcher Paper |
NT |
Plastic Film |
NT |
| Cashier Pads |
T |
Pork Loin Wrap |
NT |
| Cellophane Bags |
NT |
Prepackaging Trays |
NT |
| Cellophane, Sheets or Roll |
NT |
Pressure Sensitive Tape |
NT |
| Cellophane Cutters |
T |
Price Markers |
T |
| Egg Cartons |
NT |
Produce Bags |
NT |
| Food Pails and Tubs |
NT |
Roll Paper |
NT |
| Greaseproof Paper |
NT |
Sausage Boxes and Liners |
NT |
| Grocery Bags |
NT |
Signboard |
T |
| Gum Tape |
NT |
Skewers |
T(1) |
| Gum Tape Dispensers |
T |
Steak Interleaver |
NT |
| Heat Sealing Equipment |
T |
Sugar Bags |
NT |
| Ice Cream Bags |
NT |
Sweeping Compound |
T |
| Labels |
NT |
Ti-Paks and Twistems |
NT |
| Locker Paper |
NT |
Trays |
NT |
| Marking Pencils |
T |
Twine |
NT |
| Meat Boards |
NT |
Window Display Bags |
NT |
(1) Nontaxable only if accompanies sale and cannot be reused.
(b) FOOD AND BEVERAGE SERVERS:
- (Restaurants, Drive-ins, Cafeterias, Concession Stands, Bars, Lounges, and Night
Clubs)
| Adding Machine Tape |
T |
Paper Cans and Pails |
NT(2) |
| Aluminum Foil |
T |
Paper Plates |
NT |
| Aluminum Plates |
NT |
Paper Trays |
NT |
| Barbeque Bags |
NT |
Paper Linen Caps |
T |
| Bibs |
T |
Patty Paper |
NT |
| Burger Cups |
NT |
Place Mats |
T |
| Burger Cup Holders |
T |
Printing Charge on Special Print Orders |
T |
| Butter Chips |
NT |
Sandwich Bags |
NT |
| Chop Holders |
T |
Sandwich and Drink Trays |
NT |
| Coasters |
T |
Skewers |
T |
| Cocktail Forks and Spoons |
T |
Souffle Cups |
NT |
| Coffee Stirrers |
T |
Steak Markers |
T |
| Crab Shells |
NT(2) |
Straws |
T |
| Creamer Caps |
T |
Sundae Dishes |
NT(2) |
| Cups and Lids |
NT |
Table Covers |
T |
| Cup Carriers |
T |
Table Wiping Towels |
T |
| Cup Dispensers |
T |
Tableware, Plastic and Spoons |
T |
| Doilies |
T |
Tissue, 12 x 12 M.G. |
NT(1) |
| Eclair Cases |
NT |
Toilet Tissue |
T |
| Guest Checks |
T |
Toothpicks and Frills |
T |
| Hot Dog Trays |
NT |
Towels |
T |
| Kone Bottles |
NT |
Tray Covers |
T |
| Napkins |
T |
Waxed Paper |
NT(2) |
| Napkin Dispensers |
T |
Wooden Forks and Spoons |
T |
| Paper Bags |
NT |
Wooden Dishes |
NT(2) |
(1) When used as sandwich wrap - NT, when used as napkin - T.
(2) Nontaxable only if accompanies sale and cannot be reused.
(c) LAUNDRY AND DRY CLEANING SUPPLIES:
| Bridal Gown Boxes |
T |
Shirt Bags |
T |
| Coat Retainers |
T |
Shirt Bands |
T |
| Collar Supports |
T |
Shirt Boards |
T |
| Garment Bags |
T |
Shirt Boxes |
T |
| Garment Roll Film |
T |
Shirt Pax |
T |
| Garment Roll Film Dispenser Racks |
T |
Shirt Shells |
T |
| Hanger Shields and Guards |
T |
Storage Bags |
T |
| Hangers |
T |
Sweater Bags |
T |
| Laundry Boxes |
T |
Tape |
T |
| Laundry and Launderette Bags |
T |
Trouser Guards |
T |
| Laundry Shells |
T |
Twine |
T |
| Paper Cutters |
T |
Wrapping Paper |
T |
(d) RETAIL BAKERY AND CANDY SHOPS:
| Adding Machine Tape |
T |
Jiffy Bags |
NT |
| Aluminum Foil |
NT(1) |
Labels |
NT |
| Aluminum Pie and Cake Plates |
NT(1) |
Marking Pencils |
T |
| Bakery Bags |
NT |
Pan Liners |
NT(1) |
| Bakery Boxes |
NT |
Paper Cans |
NT |
| Bakery Tissue |
NT |
Paper Caps |
T |
| Baking Cups |
NT(1) |
Paper Cutters |
T |
| Bread Bags |
NT |
Paper Pie Plates |
NT(1) |
| Cake Circles |
NT(1) |
Parchment |
NT |
| Candy Bags |
NT |
Ribbon |
NT |
| Candy Cups |
NT |
Sales Books |
T |
| Cellophane |
NT |
Sandwich Bags |
NT |
| Cellophane Bags |
NT |
Sandwich Wrap |
NT |
| Doilies |
NT(1) |
Shredded Cellophane |
NT |
| Eclair Cups |
NT(1) |
Signboard |
T |
| Food Pails and Tubs |
NT(1) |
Sweeping Compound |
T |
| Gift Wrap |
NT |
Toothpicks and Frills |
T |
| Glassine Bags |
NT |
Transparent Tape |
NT(2) |
| Grocery Bags |
NT |
Twine |
NT |
| Gum Tape |
NT(2) |
Wax Paper |
NT |
| Gum Tape Dispensers |
T |
Window Bags |
NT |
| Heat Sealing Equipment |
T |
Wrapping Paper |
NT |
(1) Nontaxable only if accompanies sale and cannot be reused.
(2) If used as part of package.
(e) DRUG, VARIETY, AND SUNDRY STORES: (See also Food and Beverage Servers)
| Adding Machine Tape |
T |
Notion Bags |
NT |
| Gift Wrapping Paper |
NT |
Paper Cutters |
T |
| Grocery Bags |
NT |
Prescription Bags |
NT |
| Guest Checks |
T |
Ribbon and Accessories |
NT |
| Gum Tape |
NT |
Sanitary Napkin Bags (resale) |
NT |
| Gum Tape Dispensers |
T |
Shopping Bags |
NT |
| Prescription Medicine Bottles |
NT(1) |
Signboard |
T |
| Prescription Medicine Boxes |
NT(1) |
Twine |
NT |
| Prescription Medicine Jars |
NT(1) |
Wrapping Paper |
NT |
| Millinery Bags |
NT |
|
|
(1) Nontaxable only if accompanies sale and cannot be reused.
(2) If used as part of package.
(f) FLORISTS AND NURSERIES: (1)
| Cellophane |
NT |
Polyethylene Rolls and Bags |
NT |
| Cellophane Bags |
NT |
Polyethylene & Paper Cutters |
T |
| Cellophane Tape |
NT |
Pressure Sensitive Tape |
NT |
| Florist Tissue |
NT |
Ribbon and Accessories |
NT |
| Flower Boxes |
NT |
Shredded Cellophane |
NT |
| Flower Pots |
NT |
Ti-Paks and Twistems |
NT |
| Gift Papers and Foil |
NT |
Twine |
NT |
| Gummed Tape |
NT |
Wrapping Paper |
NT |
| Gummed Tape Dispensers |
T |
Wrapping Tissue |
NT |
| Paper Bags |
NT |
(g) RETAIL DEPARTMENT STORES & SPECIALTY STORES:
- (Includes Book and Stationery Stores, Gift Shops, Hardware Stores, etc.)
| Curtained Rod Bags |
NT |
Notion Bags |
NT |
| Garment Bags |
NT |
Paper Cutters |
T |
| Garment Bag Boxes |
NT |
Record Bags |
NT |
| Gift Boxes |
NT |
Ribbon and Accessories |
NT |
| Gift Wrap |
NT |
Sales Books |
T |
| Grocery Bags |
NT |
Shirt Bags |
NT |
| Gum Tape |
NT |
Shoe Bags |
NT |
| Gum Tape Dispensers |
T |
Shopping Bags |
NT |
| Ice Bags |
NT |
Shredded Cellophane |
NT |
| Jiffy Bags |
NT |
Shredded Tissue |
NT |
| Labels |
NT |
Signboard |
T |
| Lampshade Bags |
NT |
Transparent Tape |
NT |
| Marking Pencils |
T |
Twine |
NT |
| Millinery Bags |
NT |
Wrapping Paper |
NT |
| Millinery Boxes |
NT |
Wrapping Tissue |
NT |
| Nail Bags |
NT |
(h) MEAT AND POULTRY PACKERS, FOOD LOCKERS AND DAIRIES: (1)
| Butcher Paper |
NT |
Ice Cream Cans and Cartons |
NT |
| Butter Tubs |
NT |
Ice Cream Pails |
NT |
| Butter Wraps |
NT |
Ice Cream Sticks |
NT |
| Cellophane and Plastic Films |
NT |
Marking Pencils |
T |
| Cellophane Tape |
NT |
Meat Boards |
NT |
| Chic Pax |
NT |
Parchment |
NT |
| Chic Tainer Trays |
NT |
Poly Bags |
NT |
| Cone Bottles |
NT |
Pork Loin Wrap |
NT |
| Creamer Caps |
NT |
Poultry Bags |
NT |
| Cups and Tubs |
NT |
Sacks |
NT |
| Egg Cartons |
NT |
Sausage Boxes and Liners |
NT |
| Freezer and Locker Paper |
NT |
Spoons, Forks and Knives |
T |
| Freezer Tape |
NT |
Straws |
T |
| Grocery Bags |
NT |
Ti-Paks and Twistems |
NT |
| Gum Tape |
NT |
Twine |
NT |
| Gum Tape Dispenser |
T |
Waxed Paper |
NT |
| Ham Wraps |
NT |
Wrapping Paper |
NT |
| Ice Cream Bags |
NT |
(1) If the sales are made to a food locker business - it must be determined
if the products are used in rendering a service, or if they are in the
actual retail meat business. If they are wrapping meat for customers to
be stored in their individual lockers - this is a service and the items
are taxable.
(i) FARMS, ASSEMBLERS OF FARM PRODUCTS:
| Box Liners |
NT |
Hay Baling Ties or Twine |
NT(1) |
| Butter Tubs |
NT |
Labels |
NT |
| Car Liners |
T |
Marking Pencils |
T |
| Cellophane |
NT |
Poly Bags |
NT |
| Cellophane Bags |
NT |
Poly Sheets and Rolls |
NT |
| Cellophane Tape |
NT |
Potato Bags |
NT |
| Chic Pak |
NT |
Poultry Bags |
NT |
| Chic Tainer Trays |
NT |
Prepackage Trays |
NT |
| Containers for Packaging Bees or Worms for Sale |
NT(1) |
Shredded Paper and Cellophane |
NT |
| Egg Cartons |
NT |
Tomato Cartons |
NT |
| Flour and Meal Bags |
NT |
Twine |
NT |
| Fruit Baskets |
NT(1) |
Window Bags |
NT |
| Grocery Bags |
NT |
Wrapping Paper |
NT |
| Gum Tape |
NT |
Wrapping Tissue |
NT |
| Gum Tape Dispensers |
T |
(1) Nontaxable if accompanies sale and cannot be reused.
(Readopted through APA effective October 1, 1982, amended July 25, 1994,
amended July 30, 1998)
Numeric Index