Please explain why for each: The Anna Drink Company sells soft drinks. Consider if Anna has to pay sales tax on the acquisition of containers: a. In State Brown (which does not have a specific container law) Anna sells 6 packs of its popular Annacoolada in throw away cans. This would generally be considered to be a retail purchase by the manufacturer although a minority of states might exempt the sale of throw away cans as purchases for resale. In all instances, courts have ruled the the purchase of reusable bottles, by the manufacturer, to be taxable retail sales. b. Also in State Brown, Anna sells, as part of a special promotion with a baseball team, the Annacoolada in a reusable mug. In this instance, you can make an even stronger argument that the retail consumer is acquiring the container, so the resale exemption looks a lot more rational. c. Same as A except that the sale occurs in State Black which has a special statute addressing the acquisition of containers. See Note C on p. 740, 10th ed.; p. 755, 11th ed. ). Many states have a specific statute addressing containers making them exempt from the sales tax as a sale for resale.

a. In State Brown, without a specific container law, the purchase of throwaway cans by Anna Drink Company would generally be considered a taxable retail purchase. This is because the cans are seen as part of the product sold to the consumer, and not for resale in themselves. The cans are merely the medium through which the soft drinks are delivered to the consumer. However, a minority of states might view these cans as being purchased for resale (since the soft drink cannot be sold without them), and therefore might exempt the cans from sales tax. Reusable bottles, on the other hand, are typically considered taxable because they are seen as a cost of doing business and not for resale; the manufacturer is the end user of these bottles. b. For the special promotion with the baseball team, where Anna Drink Company sells Annacoolada in a reusable mug, the argument for the mugs being exempt from sales tax is stronger. This is because the mugs are a distinct item that the consumer is purchasing, and the drink is an added benefit. The consumer is likely to reuse the mug, and it could be considered a product for resale. The mug has value on its own, separate from the drink, and thus the transaction could be seen as a sale of the mug with the drink included, which might qualify for a resale exemption. c. In State Black, if there is a specific statute addressing the acquisition of containers, the purchase of throwaway cans by Anna Drink Company may be exempt from sales

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