Rule 20. - Containers, wrapping and packing materials, and related products sales.

When used in this rule, the term "containers" includes all containers, wrapping and packing materials, bags, twines, wrapping papers, gummed tapes, cellophane, boxes, bottles, drums, cartons, sacks or other packing, packaging, containing [containers] and wrapping materials in which tangible personal property may be contained. Where persons engaged in the business of selling containers sell same to other persons for use by such other persons in connection with shipping or delivering their own tangible personal property, or for use in connection with rendering service, (whether taxable services or not), or for personal or other uses, the sales are taxable. If the purchaser of the containers is engaged in the business of selling tangible personal property placed in such containers to other persons, and title to such containers passes to such other persons, together with title to the tangible personal property contained therein, the containers shall be deemed to be sold for the purpose of resale.

If the purchaser of the containers is engaged in the business of selling tangible personal property placed in such containers to other persons, and the title to such containers is retained by the seller of the tangible personal property contained therein, and such containers are intended by the seller merely to provide a means for containing tangible personal property while in the process of being delivered or conveyed to purchasers and are to be returned to the seller for reuse, then the containers shall be deemed to be sold to the consumer, and the tax must be collected.

A sale of paper napkins, towels, drinking straws, paper cups or plates, and similar items, when sold to a purchaser for use in connection with the conduct of his business and not resold in their original state, is taxable.