This Ruling has been obsoleted by AN 2000(8)
Agent for Sale
According to your letter, Company X is a non-profit organization that provides courses teaching various arts and crafts to its students. Some of the goods made by the students are sold in a store located at and run by the Company X Additionally, artists and craftsmen from throughout the country will send articles that they have made to the school for sale. The school does not purchase the articles initially nor does it take legal title to them. The articles can be returned to the artist. For those articles that are sold, the school will purchase them at 60% of the gross sales price and will retain 40% for use in conducting its own programs.
Effective July 1, 1989, the sales tax on services applies to the "services of the agent of any person in relation to the sale of any item of tangible personal property for such person; section 12-407(2)(i)(V) of the Connecticut General Statutes, as amended by Public Act No. 89-251.
Please be advised that 40% of the selling price of an item retained by Company X is a taxable fee or commission that is subject to sales tax.
November 21, 1989