Part II. National Sales and Use Tax

SECTION 5. NATIONAL SALES AND USE TAX IMPOSED
 

(A) There is hereby levied, and there shall be collected and paid, a tax of 14 percent upon the consideration or the purchase price paid or the fair market value of the retail sale or use of all property or rights to property or the conversion of taxable property or services to private or personal use and upon all secondary sales of commercial investment securities of whatever type, both domestic and foreign, and upon all sales of commercial enterprises and business investments, in whole or in part, both domestic and foreign, exchanged in commerce by any person within the jurisdiction of the United States of America, excepting those items specifically excluded from this national sales and use tax by Act of Congress.

(B) There is hereby levied, and there shall be collected and paid upon gaming activities and services by the gaming sponsor, a tax of 8 percent of the gross gaming receipts less total gaming payoffs to chance purchasers and government entities or sponsors, when acting in their governmental capacities only.

(C) Exemptions:

(1) All sales to the United States government, to its departments and institutions, and to its political subdivisions, when acting in their governmental capacities only;

(2) All sales of licenses, permits, passports, visas and all charges for public services or user fees made by the United States government or the governments of the States or Territories of the United States and their political subdivisions, when acting in their governmental capacities only;

(3) All sales of precious metal bullion, coins, and currency;

(4) All sales made to or by charitable organizations in the conduct of their regular activities or charitable functions and where their sales are not for profit and are not unduly competitive with sales made by others subject to the tax;

(5) All sales made to or by nonprofit schools where the items purchased or sold by the school are not for pecuniary gain, are required for normal rather than extraordinary operation, and where all sales made to the public—such as books sold at a school-operated book store or tickets to public events or food service at school-operated cafeterias, snack bars, or student unions—remain taxable;

(6) All sales of drugs dispensed by prescription; of all corrective eyeglasses, contact lenses, or hearing aids; of all therapeutic agents, devices, appliances, or their related accessories or materials when furnished, prescribed or recommended by any licensed practitioner of the medical arts for the treatment or relief of any human impairment or disability; and all compensation or fees paid to licensed practitioners of the medical arts for their professional services;

(7) All sales in the nature of rents or leases of real estate for which a written agreement exists providing for the exclusive use by any person for any continuous period of not less than sixty consecutive days;

(8) All sales of groceries;

(9) All sales of plants, livestock and fish customarily used in the production of food for human consumption; embraces—all sales of meat cattle, sheep, lambs, poultry, swine, and goats; all sales of livestock for breeding purposes; all sales of live fish for stocking purposes; all sales of feed for livestock; all sales of seeds, orchard trees or other plants for food production;

(10) Incidental or occasional sales, not exceeding three events per year, of used tangible private property where the primary motive for the transaction is trade rather than profit through commerce and where the transactions are made through use of “want ads” or as a part of a “yard” or “garage” sale;

(11) Incidental or occasional sales for the purpose of recycling materials;

(12) Fifty percent of the purchase price paid for the retail sale of all used tangible property exchanged in commerce, excluding remanufactured items sold with warranties exceeding 90 days;

(13) Ninety percent of the purchase price paid for all secondary sales of commercial investment securities of whatever type, excluding the transferable securities of the United States government and all its political subdivisions which are exempt from the tax;

(14) All sales of insurance or surety bonds;

(15) Meals provided by employers to employees at their places of employment at no charge or at reduced charges which are considered as partial compensation for their labor;

(16) The identified and segregated labor portion of written retail contracts, such as professional service, construction, maintenance and service industry contracts;

(17) Real estate transactions to the extent that the national sales tax has been paid, or would have been paid had this Act been in force, coincidental with the previous retail transaction or for transactions in progress when this Act becomes law;

(18) All sales of printed matter of a periodical nature, such as newspapers, magazines, news letters, directories and sales catalogs that are nonprofit in nature or whose primary purpose is to promote sales subject to the national sales and use tax or to carry paid advertisements subject to that tax.

(19) Compensation paid for celebrity endorsements to the extent that they are personally promoting or autographing their own products or talents but not personal endorsements or reproduced stamped or printed autographs on other commercial products.

(20) Compensation paid for the domestic sale, use or licensing of patents, copyrights, or processes in domestic production but not foreign sales.

(22) Any premiums, benefits, or alternate currencies, for example, “coupons” or a “free” airline ticket based on “frequent flyer miles,” derived from taxable transactions in commerce upon which the imposed tax was collected and whose primary purpose was to promote those taxable commercial transactions.

Read Explanation and Details for Section 5.