Is a dealer’s purchase of packaging materials, including pallets, that are used to package tangible personal property sold in a retail sale or sale for resale exempt from sales and use tax?

Yes, packaging materials, including pallets, containers, labels, sacks, bags, or bottles, used for packaging products that will accompany the products when sold in a retail sale or sale for resale are exempt from sales and use tax.   The dealer should present a completed Streamlined Certificate of Exemption to its supplier to purchase the packaging materials exempt from sales and use tax.  On line 4 of the exemption certificate, the purchaser should select its type of business (e.g., retail trade, manufacturing or wholesale trade). On line 5 of the exemption certificate, the purchaser should select box L “other” and include the explanation “packaging used incidental to the sale of products.”  For more information, see important notice 18-16.