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@109 CHAP 11
@CODE: HI NM
@CODE:EN

          ┌───────────────────────────────────────────┐
          │      SALES AND USE TAXES (IN GENERAL)     │
          └───────────────────────────────────────────┘

@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 retailer,
buys goods for resale, you need not pay sales tax to the
wholesalers if you provide them with resale certificates.

@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) within
the state, a "use tax" or compensating tax, applies to the
storage, use or other consumption of such property purchased
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
presence, the sale is usually not subject to sales tax in
either state, since it is an interstate sale.  However,
technically, 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
enacted 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 subject
to sales or use tax in the state, treating such direct sales
as taxable.  Some states have aggressively enforced these
broad laws, which would definitely begin to cramp the style
of many mail order firms if these laws were upheld in court.

BOTTOM LINE:  Don't assume that such interstate sales are
still "sales tax-free," at least in many states.  (For
example, a Tennessee law even imposes use tax on free mail
order catalogs shipped into the state, whether or not any
sale is made.)

MAIL ORDER DEVELOPMENTS:  The U.S. Supreme Court ruled,
in the case of Quill Corp. v. North Dakota (1992), that a
state may NOT force out-of-state mail order retailers to
collect use tax on sales to residents of the state, where
the company had no presence in the state, holding that such
a tax law violated the Commerce Clause of the United States
Constitution, not to mention a Federal law, P.L. 86-272.

Thus, the Supreme Court, in one fell swoop, invalidated
many, if not all, of the broad new mail order use tax laws,
targeted to hit mail order firms, that had been adopted in
some 34 states in recent years, prior to the Quill decision.
While this was good news for mail order retailers, the bad
news is that the court also indicated 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
few years, now that the Supreme Court has opened that door.

In fact, just such a bill was introduced in the U.S. Senate
in 1994 by Sen. Dale Bumpers (D) of Arkansas, inaptly named
the "Tax Fairness for Main Street Business Act of 1994."
While it failed passage in 1994, he reintroduced the bill
in 1995, as the "Consumer and Main Street Protection Act of
1995." (Apparently intended to protect us poor, befuddled
consumers from low mail order prices...?)  This bill, too,
failed to pass, but will no doubt be back, as the states
continue to pressure for the right to impose sales tax on
interstate commerce.

The Bumpers bill would grant states the right to enact laws
requiring out-of-state sellers of tangible personal property
to collect and remit state and local sales-use taxes if:

  .  the seller is subject to the personal jurisdiction of
     the taxing state;

  .  the tangible personal property has a final destination
     in the state in question;

  .  the seller's gross receipts from sales of such property
     in the 12 months ending September 30 of the calendar
     year before the year of the sale exceeded $100,000 in
     the taxing state or $3 million in the U.S. as a whole;
     and

  .  the taxing state collects and administers all of the
     local sales-use taxes imposed on behalf of its local
     jurisdictions (cities, counties, etc.).

Where a state has non-uniform local sales tax rates, the
proposed legislation gives the seller the choice of either
collecting tax at the appropriate rate in each local
jurisdiction, or collecting tax at a flat state-wide rate,
based on an average rate determined by the state, rounded
to the nearest 0.25%.

Thus, if this or another federal law authorizing such use
tax collections is enacted, it seems likely it will provide
some exemption for smaller retailers and a simplified,
state-wide tax rate and payment method for sellers who have
only minimal sales in each of a number of states.  Or so we
fervently hope.... (Otherwise, most small mail order sellers
would quickly be forced out of business, due to the
inordinate complexity and enormous cost of filing annual or
even quarterly sales tax returns for every state and local
taxing district where any sales are made.)

@CODE: CA
        ┌──────────────────────────────────────────────┐
        │       CALIFORNIA SALES AND USE TAX LAW       │
        └──────────────────────────────────────────────┘

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 required
for each place of business where goods subject to tax are
sold.  To obtain a permit, it is necessary to submit a
completed registration form, Form BT-400 or BT-403.  There
is no fee for obtaining a permit, but you may be required
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 registering
for the sales tax post a deposit (except for retailers 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 totalling 3 times
their estimated monthly sales tax collection (up to $10,000).
Dropping this requirement is intended to lower one barrier
to the creation of new small businesses.

The state wide sales tax rate is 6%, plus a minimum 1.25%
local sales tax.  Thus, sales tax rates in California range
from 7.25% in most rural counties to as high as 8.25% in
some of the urban counties, such as Alameda county, and San
Francisco voters have approved an additional 0.25% sales tax
increase, which raised the sales tax rate to 8.5% in San
Francisco (City and County), the highest in the state of
California.

Beginning October 1, 1994, there was a temporary roll back
in the Monterey County sales tax rate to only 6.5%, which
is 0.75% lower than in any other county in the state.  This
reduced rate was to remain in effect until certain sales tax
funds collected under an invalid county sales tax in prior
years, now impounded in a separate fund, had been returned
to consumers by means of the special reduced tax rate.  The
rate returned to 7.25% on 4-1-96.  San Diego's temporary 7%
tax rate, also reduced by a court order, went back up to
7.75% on 4-1-96.  In addition, the Santa Clara County rate
of 8.25% dropped to 7.75% on April 1, 1995, as a Traffic
Authority tax expired.  A new 0.5% transit sales tax, which
would have replaced the expiring Santa Clara County tax, is
not to be implemented until the courts have decided its
constitutionality under California's Proposition 13.

Tulare County increased its overall sales tax rate from
7.25% to 7.75%, effective October 1, 1995.

SALES TAX EXEMPTIONS. 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).

A start up trade or business that is organized or formed and
begins business activity in California on or after January
1, 1994 can elect to exempt depreciable tangible personal
property it purchases from the state portion (6%) of the
sales tax.  As the purchaser, you must furnish the retailer
with a completed exemption certificate to avoid paying the
6% sales tax on such purchases.  (You will still have to
pay the local portion of the tax, ranging from 1.25% to
2.5%.)  If you elect to claim this sales tax exemption,
you are not eligible to claim the California investment
tax credit (ITC) on such purchases.

SALES AND USE TAX RETURNS.  California sales and use tax
returns usually must be filed and tax paid within one
month after the end of each calendar quarter, although
larger businesses may be required to make more frequent
payments of tax, and, in some cases, make payments by
means of electronic funds transfers (EFT).

Note that a new and simplified sales and use tax return
(Form BT-401-EZ) is now available and may be filed if a
business:

  . operates from a single location in the county;

  . doesn't sell fuel, autos, boats or aircraft or
    make sales to aircraft common carriers;

  . doesn't claim credit for sales tax paid to other
    states;

  . doesn't engage in fixed-price contracts or leases;
    and

  . claims no exemptions for returned merchandise, tax-paid
    purchases that are resold, cash discounts, bad debts,
    or other exempt transactions that are not provided for
    on the simplified form.

@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 5.75% of
retail sales for sales or rentals, or for storage, use
or consumption 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.  Effective October 1,
1994, the rate on transient accommodations increased from
11% to 13%, and the tax rate on the other special items
increased from 9% to 10%, under a new tax imposed to fund
a new convention center in the District.

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
nontaxable purposes are required to first obtain a
certificate of registration from the Department of Finance
and Revenue.

@CODE:EN

The general state wide sales/use tax rate in @STATE is:
@CODE: CO
3 percent.  Denver has a 3.5% sales and use tax rate, plus
a total of another 0.8% for Regional Transportation District
Sales Tax and other special taxes.  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
such "home rule" cities.

Sellers must register to obtain a Colorado sales tax license,
for which there is a $16 fee per place of business (which
must be renewed every 2 years), plus a $50 tax prepayment or
deposit.

@CODE:OF
@CODE: WY
4 percent.  The rate was scheduled to drop to 3% on July 1,
1996, but on March 1, 1995, Governor Geringer signed into
law a two year extension of the 4% tax rate, until July 1,
1998.  However, if certain government fund balances are
met or exceeded before 1998, the Governor may make such a
determination before April 1 of any such year, in which case
the rate will be decreased by 0.5%, to a total rate of 3.5%,
as of the following July 1st.

Wyoming counties 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% lodging 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 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.

Effective August 15, 1994, Louisiana has adopted an
ADDITIONAL 4% sales and use tax upon vendors who engage
in mail order sales and who are "dealers" in Louisiana.
"Dealer" is broadly defined to include anyone vendor
engaging in regular or systematic solicitation of sales
in the state by distribution of catalogs, periodicals,
flyers, or other advertising, or by means of print, radio
or television media.  This bill was enacted despite the
recent major U.S. Supreme Court decision in the Quill
Corporation case, which, as noted above, held such attempts
to impose sales or use taxes (not to mention EXTRA sales
and use taxes) upon out-of-state mail order vendors
unconstitutional.

It seems likely that the constitutionality of this new
Louisiana tax statute will also be challenged, as it
seems to fly directly in the face of constitutional
requirements, as recently reaffirmed by the U.S. Supreme
Court (and several other state courts since the Quill
decision).

          ┌───────────────────────────────────────────┐
          │UPDATE:  The Louisiana Dept. of Revenue has│
          │announced that it will not try to enforce  │
          │this added 4% sales tax until a Federal law│
          │is enacted that will permit states to force│
          │out-of-state vendors to collect sales / use│
          │tax on mail order sales.                   │
          └───────────────────────────────────────────┘

@CODE:OF
@CODE: MI
6 percent.

In a special election held March 15, 1994, Michigan voters
chose to increase the state sales and use tax rate from 4%
to 6%, in return for major cuts in property tax rates and
a small reduction in the state income tax.  The increase in
the sales tax rate is effective May 1, 1994.

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).  This 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 up to 4.5% 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% Metro Commuter District tax.

Sellers are required to register and obtain sales tax
certificates 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
receipts 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
reduced rates of 1%, 2% or 3%, and most such items are
fully exempted from the 1% local option (county) sales
taxes.  The tax rate on food is reduced to 3%, effective
as of January 1, 1997.  Some of such reduced-rate 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, except
certain exempted services, such as health and educational
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
devices.  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.  There was also a uniform local use tax of
1.5%, making the total use tax rate 5.725% -- Missouri was
the only state with a use tax rate that differs from the
sales tax rate.  However, the U.S. Supreme Court held in
1994, in Associated Industries v. Missouri, that this
higher use tax is partially unconstitutional, and was
discriminatory against interstate commerce in any taxing
districts where the local sales tax was less than 1.5%.
On May 21, 1996, a new law was adopted, reinstating the
local use tax, but limiting it to the same rate as the
local sales tax, and made applicable only to those
transactions to which the state use tax applies.

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
register 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.  There is an additional 3.5% sales tax on
motor vehicle rentals of up to 28 days.  Many cities and
counties also impose sales taxes of 1% to 2%, which are
administered and collected along with the state sales tax
by the Kansas Department of Revenue.  The sales tax applies
to a number of kinds of services, including dry cleaners,
laundries, 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 decided in the November,
1994 election not to increase the sales and use tax rate
to 4.625%, but it appears from early unofficial returns
in the 1996 election that such an increase to 4.625% will
be approved, effective as of July 1, 1997.

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 Arkansas tax legislation has greatly expanded the
sales tax, to cover a wide range of previously nontaxable
services, such as cleaning or janitorial work, pool
services, lawn care, landscaping, auto parking and storage,
and others.

Businesses that are required to collect sales tax must
obtain 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 newspaper 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 NB ND OH SC MD MA WS
5 percent.

@CODE:OF
@CODE: IN
5 percent, with no local sales or use taxes imposed.  (But
a number of counties have lodging taxes and some have food
and beverage taxes.)

The Indiana sales tax generally applies only to transfers
of tangible personal property.  With few exceptions,
services are exempt from tax, except where there is also
a transfer of tangible personal property.

Retail merchants must register with the Sales Division of
the Department of Revenue.  A sales tax certificate must
be obtained (and a $25 fee paid) for each place of business
in the state of Indiana.

@CODE:OF
@CODE: UT
5.875 per cent, including local 1% local sales/use taxes.
There is a special 2% tax rate on gas, electricity, heat,
coal, fuel oil or other fuels sold for residential use.

Utah sales tax applies to retail sales of tangible personal
property and also to certain services, such as repairs,
renovations, 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 registration
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
transaction 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
require applicants to post a surety bond in order to obtain
the license.

@CODE:OF
@CODE: ID
In addition to the general 5% state sales tax, there is an
extra 2% sales tax on revenues of hotels, motels and
campgrounds, for rentals of less than 31 days.

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 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 from September 1, 1993 until June 30, 1997, and
4 percent thereafter.

@CODE:OF
@CODE: IA
5 percent, with an additional 5% tax on motor vehicle
rentals of up to 60 days.  The Iowa sales tax also applies to
a number of services, such as repair services.  In addition
to the 5% state wide tax rate, counties are also allowed to
adopt local sales taxes (but not use taxes), and localities
can also impose hotel and motel taxes.

Any person, resident or nonresident, who makes retail sales
at permanent locations in Iowa must obtain a sales tax permit
for each such location, from the Iowa Department of Revenue.
There is no fee for the permits (which remain invalid until
revoked by the state).

A Uniform Exemption Certificate is provided by the Department
of Revenue.  Sellers who make sales for resale need not
collect sales tax if they receive (in good faith) an
Exemption Certificate from the buyer.

@CODE:OF
@CODE: TN
6 percent.  Tennessee also recently enacted a separate tax
on certain types of services, of 6.75%, repealing the
sales tax on such services.  Effective January 1, 1994,
the separate tax has expired, and the specified services
are once again subject to regular sales tax.

@CODE:OF
@CODE: FL
6 percent.  The Florida sales tax is now 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 exemptions, including
rentals 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
convention and tourist development taxes on hotel
accommodations, 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 state wide
tax of 6%.

Sales and use taxes are administered by the Florida
Department of Revenue.  Persons engaging in a business
subject to tax must apply to the Department of Revenue for
a certificate 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: ME WV PA
6 percent.

@CODE:OF
@CODE: KY
6 percent.  Local sales taxes are generally not imposed in
Kentucky.  However, localities are allowed to impose hotel
and motel taxes of up to 3% (4% in urban counties).

Businesses or persons engaged in business as retailers must
obtain a permit from the Kentucky Revenue Cabinet for each
place of business within the state.  Contractors engaged in
construction work exclusively do not need such permits.

A purchaser must be registered with the Kentucky Revenue
Cabinet in order to give a valid Resale Certificate to a
seller (to buy goods for resale, without paying sales tax
to the wholesaler).

Kentucky allows a retailer to keep a small portion of the
sales tax collected, as an "administrative fee" to help
cover the costs of collecting and paying over the tax.  The
fee is equal to 1.75% of the first $1,000 of tax (annually),
and 1% of the excess (allowed only if all tax is paid over
on a timely basis).

@CODE:OF
@CODE: CT
6 percent.  No local sales or use taxes are imposed.

The Connecticut sales tax applies primarily to retail sales
of tangible personal property, furnishing food, meals and
drinks, leases or rentals of tangible personal property,
and certain services, excluding professional services,
insurance and most personal services.  Services that are
taxable include producing, fabricating, processing, printing
or imprinting of tangible personal property for consumers
who furnish the materials used.  Leases or rentals of
accommodations for periods of 30 days or less are also
subject to tax, but at a rate of 12%.

Also taxable are a wide number of other specific services,
but the recent (June 13, 1994) Omnibus Tax Bill phases out
state sales tax on a number of products and services over
several years, including:  the tax on tax preparation fees
for business tax returns; the sales taxes on computer/data
processing services; tax on health and athletic services;
and the tax on various environmental services that were
formerly subject to sales tax.

Sellers in Connecticut are required to obtain a permit to
engage in or do business as a seller within the state, and
must file with the Commissioner of Revenue Services an
application for a tax permit for each place of business, on
a prescribed form.  There is a $20 fee for each permit.

@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
intrastate 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
obtain 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
The Maine sales tax applies not only to retail sales or
leases of tangible personal property, but also to various
communications services, room rentals (under 28 days), auto
rentals of less than a year, fabrication services and cable
television service.

Vendors making taxable sales of personal property or services
(other than "casual" sellers) are required to register with
the State Tax Assessor and obtain a registration certificate
for each place of business.  A certificate must be prominently
displayed at each business location.  There is no fee for
registering, put some sellers may be required to post a bond.

Sales tax returns are due monthly by the 15th of each month
(quarterly if tax is under $100 per month).  Returns are to
be filed with the State Tax Assessor in Augusta.

Sales of grocery staples are exempt from sales tax, but NOT
so-called "snack foods" (such as potato chips, ice cream,
pastries, beef jerky, and the like) or prepared food (meals
served on or off the premises of the retailer).

@CODE:OF
@CODE: MN
6 percent.  The special 4% rate on special tooling is
repealed after June 30, 1994, so that such tooling is
now completely exempt from Minnesota sales tax.  Recent
legislation (1994) also provides special low tax rates on
certain replacement capital equipment, eventually dropping
to only 2% after June 30, 1998.  However, the general
sales tax rate may increase to 6.5% after June 30, 1996,
if certain special legislative appropriations are made.

@CODE:OF
@CODE: IL
6.25%.  The Illinois sales and use taxes include a service
occupation tax at a 6.25% rate.  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 merchandise 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 that is 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 collected
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 sellers
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 collection,
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
collected 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
Comptroller.  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
6.5%, including the uniform local tax.

@CODE:OF
@CODE: WA
6.5% (8.2%, counting local taxes, in the Seattle area).
Until recently, the Washington sales and use tax applied
mainly to retail sales or leases of tangible personal
property, food and drink, amusements and entertainment,
room rentals, and to certain services.

However, due to the state's budget crunch, the state
legislature, in June, 1993 passed new legislation expanding
the coverage of the Washington sales tax to a wider range
of services.  For example, the sales tax is now extended
to numerous new service occupations, such as landscape and
horticultural maintenance, massage services, physical fitness
services, and dating services, to name a few, all effective
as of July 1, 1993.

Services that were already taxable under the Washington
sales tax law before the 1993 law changes included:

  . 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,
    abstract title insurance, and auto storage or parking;

  . telephone services; and

  . various other kinds of services.

Cities and counties in Washington impose uniformly
administered 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
occupancy 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.

Effective July 1, 1995, Washington has enacted a broad
sales and use tax exemption for manufacturing machinery
and equipment.  Items such as hand tools, items expected
to last for less than one year, repair and replacement
parts that don't improve or extend useful life of machinery
or equipment is not eligible for the exemption, nor are
fixtures such as utility systems.  A taxpayer seeking this
exemption must give its supplier an exemption certificate
in a form as required by the Department of Revenue.

Every person who engages in business in Washington as a
seller 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
business and pay tax to the state.

In the November 5, 1996 elections, King, Pierce and Snohomish
County voters approved a 0.4% sales tax increase for funding
a regional mass transit system.  This will increase the
total sales tax rate in King County (Seattle) to 8.6% and
in Pierce County (Tacoma) to 8.4%.

@CODE:OF
@CODE: MS
7 percent.

@CODE:OF
@CODE: NJ
6%.  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.  An additional 5% tax applies to transient room
rentals.  The tax does not apply to persons performing
services.

Localities in Rhode Island do not impose sales and use taxes.

The state sales and use taxes in Rhode Island are
administered by the State Tax Administrator.

Tax applies to the rental of living quarters in any hotel,
rooming house or tourist camp.  The tax doesn't apply to
persons who have a written lease that covers a rental period
of 12 months or more.

Anyone who wishes to sell at retail or rent living quarters
in the state must apply to the State Tax Administrator for
a permit for each place of business, and pay a $5 fee for
each permit.

Sales and use tax returns are generally required monthly,
by the 20th day of the following month.

@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 IA
  . furnishing, preparing or serving food on the premises,
    for on-premises consumption;

@CODE:OF
@CODE: NJ
  . certain sales of prepared food for OFF-premises
    consumption;

@CODE:OF
@CODE: AL GA MI NY SD AZ FL PA IN KY ME
  . sales of prepared food or drink for on- OR off-premises
    consumption;

@CODE:OF
@CODE: MO KS ID KY
  . meals and drinks furnished by restaurants, hotels,
    dining cars and other places where meals or drinks
    are regularly served;

@CODE:OF
@CODE: TX WA RI CT IA
  . 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 RI IN IA ME
  . 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 RI CT IN IA KY ME
  . certain telephone services;

@CODE:OF
@CODE: WY GA LA NY SD MO KS AR OK AZ FL NJ ID TX WA UT IA KY
  . admissions to places of amusement, recreation, games
    or athletic events, generally;

@CODE:OF
@CODE: WY SD AR TX CT LA ME MS NM SC ME
  . 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, dry cleaning,
    printing 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 CT IN IA KY ME
  . gross receipts from providing transient accommodations;

@CODE:OF
@CODE: VA NY NC AZ FL ID TX RI CT KY
  . fabrication of tangible personal property for consumers
    who furnish the property;

@CODE:OF
@CODE: WY KS AR NJ TX PA WA IA
  . 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 RI CT IN IA KY ME
  . and rentals and leases of tangible personal property.

@CODE:OF

@CODE: AL CO CT FL GA ID IL IN IA KS KY LA ME MD MA MI MN MS MO NB NV NJ NY ND OH OK PA RI 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 AR WA NC SC
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, generally);

@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 RI CT IN IA KY ME
  . 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 CT IN IA KY ME
  . sales of most kinds of prescription medicines and drugs;

@CODE:OF
@CODE: PA RI
  . sales of prescription AND non-prescription drugs,
    medicines and medical supplies;

@CODE:OF
@CODE: VA
  . non prescription drugs and proprietary medicines used
    in the cure, prevention or treatment of disease also
    became 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 RI CT IN IA KY ME
  . sales of certain kinds of medical items, such as
    prosthetic devices;

@CODE:OF
@CODE: CO WY VA LA MI NY SD AR OR FL NJ TX PA WA UT RI CT IN IA ME
  . newspapers;

@CODE:OF
@CODE: CO WY VA AL NY KS FL NJ UT KY
  . 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 RI IN
  . personal services, in general;

@CODE:OF
@CODE: CO VA AL MI NY NC MO KS AZ IL FL NJ ID PA WA UT RI IN KY
  . sales of customized computer software programs;

@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 RI CT IA KY ME
  . and sales made for resale (wholesale sales), pursuant
    to a valid resale certificate.

@CODE:OF