When a retailer buys single-part price tickets to attach to merchandise, is that purchase subject to sales tax or exempt as packaging?

Plain-English summary

Morton L. Coren, P.C. asked, on behalf of a large retail merchant operating in New York, whether the merchant's purchase of single-part "price tickets" — the labels it attaches to merchandise and garments for sale — is subject to sales tax. Modern single-part tickets are securely attached, stay with the item after sale, and carry information like size, brand, and return details; they're used with point-of-sale (POS) terminals to record and process each transaction.

The Department's answer, under Tax Law § 1105(a):

• The tickets aren't exempt packaging. Section 1105(a) taxes retail sales of tangible personal property. Section 1115(a)(15) exempts cartons, containers, and wrapping and packaging materials a vendor uses to package goods for sale and transfers to the customer, and Regulation § 528.20(b)(1) lists what counts (bags, boxes, gummed labels, tape, and the like). Price tickets don't fall in that category.
• Selling/recording tickets are taxable. Publication 852 specifically lists "price, size, style, lot number, and inspection tickets and tags which are used in selling the product" as taxable items. The Department found the price tickets are not a critical element of the goods, add nothing to their value, and are affixed solely to sell the products and record the transactions through POS terminals for fiscal and administrative purposes.
• Result: the merchant's purchase of the price tickets is subject to sales tax — no packaging exemption applies.

What this means for you

Retailers buying price tickets, tags, and labels

If you buy price tickets or tags to attach to your merchandise, expect to pay sales tax on them. They're treated as supplies used to sell and track your goods, not as exempt packaging that becomes part of what you sell.

The packaging exemption is narrower than it looks

The § 1115(a)(15) exemption covers materials that package or pack goods and are transferred to the buyer — boxes, bags, wrapping. Selling aids like price, size, and inspection tickets fall outside it, even though they physically stay on the product.

The ticket vs. the marking service are separate questions

This opinion is about the merchant's purchase of the tickets themselves. A companion opinion (the Morton L. Coren line, including TSB-A-92(46)S) addresses whether the service of marking/attaching the tickets is taxable. Both come out taxable, but they turn on different provisions.

Accountants and tax professionals

The Department applied Publication 852's express treatment of selling/inspection tickets as taxable and declined the § 1115(a)(15) packaging exemption because the tickets add no value and serve only a selling/record-keeping function.

Common questions

Q: Does a retailer pay sales tax on the price tickets it buys?
A: Yes. The purchase of single-part price tickets attached to merchandise is subject to sales tax under § 1105(a).

Q: Aren't the tickets exempt packaging materials?
A: No. The § 1115(a)(15) exemption covers cartons, containers, and packaging materials — not selling aids like price, size, and inspection tickets.

Q: Does it matter that the ticket stays on the item after sale?
A: No. The tickets add nothing to the product's value and are affixed only to help sell it and record the sale, so they remain taxable.

Q: Is this the same as taxing the ticket-marking service?
A: No — that's a separate question addressed in the related Morton L. Coren opinions. This one is about the merchant's purchase of the tickets.

Citations and references

Statutes, regulations, and publications:

• Tax Law § 1105(a) (tax on receipts from every retail sale of tangible personal property)
• Tax Law § 1115(a)(15) (exemption for cartons, containers, and wrapping/packaging materials transferred to the purchaser)
• Sales and Use Tax Regulations § 528.20(b)(1) (enumeration of packaging materials)
• New York State and Local Sales Tax Information For Manufacturers, Publication 852 (9/86), at 16 (price, size, style, lot-number, and inspection tickets used in selling the product are taxable)

Source

• Landing page: https://www.tax.ny.gov/pubs_and_bulls/advisory_opinions/sales_ao_1992.htm
• Opinion: https://www.tax.ny.gov/pdf/advisory_opinions/sales/a92_29s.pdf

Original ruling text

New York State Department of Taxation and Finance

Taxpayer Services Division
Technical Services Bureau

TSB-A-92 (29) S
Sales Tax
March 31, 1992

STATE OF NEW YORK
COMMISSIONER OF TAXATION AND FINANCE
ADVISORY OPINION

PETITION NO. S920228A

On February 28, 1992 a Petition for Advisory Opinion was received from Morton L. Coren,
P.C., 638 Meadow Court, Westbury, New York 11590.
The issue raised by Petitioner, Morton L. Coren, P.C., is whether the purchase by Petitioner's
client, a large retail merchant, of single part "price tickets" attached to merchandise and garments
for sale are subject to the imposition of sales tax.
Petitioner's client, a large retail merchant who operates within New York State, is engaged
in the retail sale of merchandise and garments. The merchant attaches "price tickets" to the
merchandise and garments for sale and the entire ticket remains with the item when the item is sold.
In the past a multi-part price ticket was in use by many retail stores. Part of the ticket was
removed at the time of sale and retained by the vendor to keep track of the merchandise sold in more
detail than was possible on the cash registers then in use. Part of the ticket may also have been
removed when inventory was taken.
Recent developments in computer technology have resulted in use of POS (Point of Sale)
terminals. These terminals have replaced cash registers at many retail stores. The details of the
transaction are entered into the POS terminal at the time of sale and are recorded and processed from
the entered data.
POS terminals have enabled retailers to eliminate many laborious steps formerly necessary
to keep track of sales. Multi-part price tickets are no longer used. With the development of POS
terminals came single part price labels that remain with the merchandise. These labels are securely
attached and cannot be easily removed. The label remains with the merchandise like any other label.
The label includes information of value to the purchaser such as size, brand and return information.
Petitioner's client is now purchasing these single part price tickets and attaching them to the
merchandise being sold.
Section 1105(a) of the Tax Law imposes sales tax upon "[T]he receipts from every retail sale
of tangible personal property, except as otherwise provided in this article."
Section 1115(a)(15) of the Tax Law provides an exemption from the sales tax imposed by
Section 1105(a) of the Tax Law for "[C]artons, containers, and wrapping and packaging materials
and supplies, and components thereof for use and consumption by a vendor in packaging or packing
tangible personal property for sale, and actually transferred by the vendor to the purchaser."
TP-9 (9/88)

-2­
TSB-A-92 (29) S
Sales Tax
March 31, 1992
Section 528.20(b)(1) of the Sales and Use Tax Regulations provides that:
Packaging material includes, but is not limited to: bags, barrels,
baskets, binding, bottles, boxes, cans, carboys, cartons, cellophane, coating
and preservative materials, cores, crates, cylinders, drums, excelsior, glue,
gummed labels, gummed tape, kegs, lumber used for blocking, pails, pallets,
reels, sacks, spools, staples, strapping, string, tape, twine, wax paper and
wrapping paper actually transferred with the product to the purchaser.
New York State and Local Sales Tax Information For Manufacturers, Publication 852 (9/86),
at page 16 notes that "[E]xamples of taxable items are: . . .Price, size, style, lot number, and
inspection tickets and tags which are used in selling the product. . ."
The price tickets which Petitioner's client attaches to its merchandise and garments are not
a critical element of the products sold and do not add to their value. They are affixed by the vendor
solely for use in selling the products and recording the transactions through POS terminals for fiscal
and administrative purposes. Therefore the purchase of the price tickets by Petitioner's client is not
exempt from the imposition of sales tax in accordance with the provisions of Section 1115(a)(15)
of the Tax Law, Section 528.20(b)(1) of the Sales and Use Tax Regulations and New York State and
Local Sales Tax Information For Manufacturers, Publication 852 (9/86) and thus are subject to the
sales tax imposed by Section 1105(a) of the Tax Law.

DATED: March 31, 1992

s/PAUL B. COBURN
Deputy Director
Taxpayer Services Division

NOTE: The opinions expressed in Advisory Opinions
are limited to the facts set forth therein.