| (a) Definitions. The following words and terms, when
used in this section, shall have the following meanings, unless the
context clearly indicates otherwise.
(1) Emergency preparation item--
(A) A portable generator used to provide light or communications
or to preserve perishable food in the event of a power outage, the
sales price of which is less than $3,000;
(B) a storm protection device manufactured, rated,
and marketed specifically to prevent damage to a glazed or non-glazed
opening during a storm, the sales price of which is less than $300;
(C) an emergency or rescue ladder, such as a collapsible
or chain ladder designed to hang from a window sill, the sales price
of which is less than $300; or
(D) an item listed in this subparagraph, the sales
price of which is less than $75:
(i) a reusable or artificial ice product;
(ii) a portable, self-powered light source;
(iii) a gasoline or diesel fuel container;
(iv) a AAA cell, AA cell, C cell, D cell, 6 volt, or
9 volt battery, or a package containing more than one battery, other
than an automobile or boat battery;
(v) a nonelectric cooler or ice chest for food storage;
(vi) a tarpaulin or other flexible waterproof sheeting;
(vii) a ground anchor system or tie-down kit;
(viii) a mobile telephone battery or battery charger;
(ix) a portable self-powered radio, including a two-way
radio or weatherband radio;
(x) a fire extinguisher, smoke detector, or carbon
monoxide detector;
(xi) a hatchet or axe;
(xii) a self-contained first aid kit; or
(xiii) a nonelectric can opener.
(2) Exemption period--The period beginning at 12:01
a.m. on the Saturday before the last Monday in April and ending at
12 midnight on the last Monday in April.
(3) Layaway sales--A transaction in which merchandise
is set aside for future delivery to a customer who makes a deposit,
agrees to pay the balance of the purchase price over a period of time,
and, at the end of the payment period, receives the merchandise.
(4) Rain check--A document assuring that a person can
take advantage of a sale or special offer made by a seller at a later
time if the item offered is not available.
(b) Exempt sales.
(1) Sales or use tax is not due on the sale of an emergency
preparation item during the exemption period.
(2) Any person can purchase emergency preparation items
tax-free during the exemption period. There is no limit to the number
of emergency preparation items one person can purchase tax-free during
the exemption period. An exemption or resale certificate is not required
to purchase an emergency preparation item tax-free during the exemption
period.
(3) The exemption applies to each emergency preparation
item sold during the exemption period, regardless of how many emergency
preparation items are sold on the same invoice. For example, a person
can purchase two generators with a sales price of $2,500 each, even
though the total price on the invoice exceeds $3,000.
(4) Emergency preparation items may be rented or leased
tax-free, including under a "rent to own" contract, if the rental
or lease contract is executed during the exemption period. Extensions
or renewals of rental or lease contracts do not qualify for the exemption
unless executed during the exemption period.
(c) Taxable sales. The exemption under this section
does not apply to:
(1) tangible personal property that is not an emergency
preparation item, as that term is defined in subsection (a)(1) of
this section, for example, camp stoves, camping supplies, chainsaws,
extension ladders, step-ladders, plywood, tents, or automobile or
boat batteries;
(2) a portable generator with a sales price of $3,000
or more;
(3) a storm protection device or emergency or rescue
ladder with a sales price of $300 or more;
(4) any item listed in subsection (a)(1)(D) of this
section with a sales price of $75 or more;
(5) repair or replacement parts for an emergency preparation
item that do not otherwise qualify for exemption; or
(6) services performed on or related to emergency preparation
items as well as warranty plans and extended protection plans. For
example, repair services for an eligible portable generator are taxable
as the repair of tangible personal property. See §3.292 of this
title (relating to Repair, Remodeling, Maintenance, and Restoration
of Tangible Personal Property) for more information.
(d) Sales of pre-packaged combinations containing both
exempt and taxable items.
(1) When an emergency preparation item is sold together
in a pre-packaged combination with an item that is not eligible for
the exemption described in subsection (b) of this section, the full
price of the pre-packaged combination is subject to sales tax, unless
the price of the emergency preparation item is separately stated.
For example, a portable generator and a portable cooking device sold
as a set for a single price is taxable regardless of the price of
the generator or the package. A separately-stated charge for the portable
generator is eligible for the sales tax exemption during the exemption
period if the sales price of the portable generator is less than $3,000.
(2) When an emergency preparation item is sold in a
pre-packaged combination that contains as a free gift an item that
is not eligible for the exemption described in subsection (b) of this
section, the emergency preparation item may qualify for the exemption
under this section if the price of the set is the same as the price
of the emergency preparation item sold separately. For example, a
portable generator with a sales price of less than $3,000 may be sold
in a package with a free extension cord. If the price of the set is
the same as the price of the portable generator sold separately, the
product that is being sold is the portable generator, which is exempt
from tax if sold during the exemption period. See §3.301 of this
title (relating to Promotional Plans, Coupons, Retailer Reimbursement)
for additional information on the seller's tax responsibility for
the free item.
(e) Sales price. Whether an item described in subsection
(a)(1) of this section satisfies the definition of an emergency supply
item, and can be purchased tax-free during the exemption period, depends
upon the sales price of the item.
(1) Delivery or shipping and handling charges. Delivery
or shipping and handling charges are included as part of the total
sales price of an item of tangible personal property, regardless of
whether the charges are separately stated.
(A) The addition of delivery or shipping and handling
charges to the price of an item may result in the item no longer qualifying
as an emergency preparation item. For example, a portable generator
with a sales price of $2,999 is eligible for the exemption during
the exemption period. A generator that sells for $2,999 and is delivered
for a charge of $25, for a total sales price of $3,024, does not qualify
as an emergency preparation item and sales tax is due on the total
sales price of $3,024, even if the sale occurs during the exemption
period.
(B) Delivery or shipping and handling charges which
are part of the sales price of an exempt item are exempt so long as
the total charge does not exceed the limits set forth in this exemption.
For example, a portable generator with a sales price of $1,999 and
delivery charge of $50, for a total sales price of $2,049, is eligible
for the exemption during the exemption period. The total sales price
of $2,049, is exempt.
(2) Discounts. A seller may offer discounts to reduce
the sales price of an item described in subsection (a)(1) of this
section in order to qualify the item as an emergency preparation item.
When a discount is given during the exemption period to reduce the
sales price of an item described in subsection (a)(1) of this section,
the item can qualify as an emergency preparation item based on the
reduced sales price.
(3) Coupons. When sellers accept a coupon as a part
of the sales price of any item of tangible personal property, the
value of the coupon is excluded from the sales price as a cash discount,
regardless of whether the seller is reimbursed for the amount that
the coupon represents. When a coupon is used during the exemption
period to reduce the sales price of an item described in subsection
(a)(1) of this section, the item can qualify as an emergency preparation
item based on the reduced sales price.
(4) Buy one, get one free or for a reduced price. The
total price of an item that is advertised as "buy one, get one free,"
or "buy one, get one for a reduced price," cannot be averaged across
two items in order for both to qualify for the exemption under this
section as emergency preparation items. For example, an emergency
rescue ladder with a sales price of $400 that is advertised as buy
one, get one free does not qualify as an emergency preparation item
based on the sales price even though the purchaser is receiving two
emergency rescue ladders and the average sales price of each would
be $200.
(5) Rebates. Rebates that are paid to a purchaser after
the exemption period do not affect the sales price of an item purchased
for purposes of determining whether an item qualifies for exemption
under this section. The full amount of the sales price, before the
rebate, is used to determine whether an item meets the definition
of an emergency preparation item.
(f) Layaway sales and purchases by means other than
in person.
(1) The sale of an emergency preparation item under
a layaway plan or purchased by mail, telephone, email, Internet, custom
order, or any other means other than in person qualifies for exemption
when either:
(A) the purchaser places on layaway the emergency preparation
item during the exemption period and the seller accepts the order
for immediate delivery upon full payment, even if delivery is made
after the exemption period;
(B) the purchaser places the order and the seller accepts
the order during the exemption period for immediate shipment, even
if delivery is made after the exemption period; or
(C) final payment on the layaway order is made by,
and the merchandise is given to, the purchaser during the exemption
period.
(2) For purposes of this subsection, the seller accepts
an order when the seller has taken action to fill the order for immediate
shipment. Actions to fill an order include placement of an "in date"
stamp on a mail order, or assignment of an "order number" to a telephone
order. An order is for immediate shipment notwithstanding that the
shipment may be delayed because of a backlog of orders or because
stock is currently unavailable to, or on back order by, the seller.
(g) Rain checks. Emergency preparation items purchased
during the exemption period with use of a rain check qualify for the
exemption regardless of when the rain check was issued. The issuance
of a rain check during the exemption period will not qualify an emergency
preparation item for the exemption if the item is purchased after
the exemption period.
(h) Exchanges.
(1) Tax is not due on an emergency preparation item
purchased during the exemption period but exchanged, after the exemption
period ends, for an emergency preparation item of equal or lesser
value.
(2) Tax is due on the difference in sales price of
an emergency preparation item purchased during the exemption period
but exchanged, after the exemption period ends, for another emergency
preparation item of greater value that would qualify for exemption
if purchased during the exemption period.
(i) Returned merchandise. For a 30-day period after
the temporary exemption period, when a customer returns an emergency
preparation item that would qualify for the exemption, no credit for
or refund of sales tax shall be given unless the customer provides
a receipt or invoice that shows tax was paid, or the seller has sufficient
documentation to show that tax was paid on the specific item.
(1) This 30-day period begins the Tuesday immediately
following the end of the exemption period and ends 30 calendar days
later with no exclusions for weekend days or holidays.
(2) This 30-day period is set solely for the purpose
of designating a time period during which the purchaser must provide
documentation that shows that sales tax was paid on returned merchandise.
The 30-day period is not intended to change a seller's policy on the
time period during which the seller will accept returns.
(j) Documenting exempt sales. A seller is not required
to obtain an exemption certificate on sales of eligible items during
the exemption period; however, the seller's records should clearly
identify the type of item sold, the date on which the item was sold,
and the sales price of each exempt item sold.
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