Nevada – Taxability of Bundled Transactions

SALT Report 1634 – In the latest issue of Tax Notes the Nevada Department of Taxation discussed the taxability of multiple items sold for one price, or bundled transactions.  Generally, if a sale of tangible personal property includes taxable items and non-taxable items or services, the entire amount of the sales price is taxable if the items are not separately stated to the customer, pursuant to NAC 372.045.
Exceptions to the Rule
If a non-itemized invoice is provided for a transaction that includes food, drugs, or medical equipment and the value of the taxable items is less than 50%, then the transaction is not considered a bundled transaction and the retailer does not charge sales tax to the buyer but pays sales tax on the cost of the taxable items to them.
If the true object of the transaction is a service, or the value of the taxable items is less than 10% of the entire transaction, then the retailer should not charge sales tax but instead pays sales tax on the cost of the taxable item to them.
For example, you pay $200 dollars to renew your wedding vows and a photograph of the ceremony ($5 value) is provided with the service.  The customer should not be charged sales tax on the $200; however tax will be due on the items used to produce the photograph.
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