NAC372.045. Bundled transactions.

     1. Except as otherwise provided by specific statute or regulation, the sales tax or use tax, as applicable, applies to the total amount of consideration received by a seller in connection with a bundled transaction.

     2. For the purposes of this section:

     (a) Except as otherwise provided in paragraph (b), “bundled transaction” means the retail sale of two or more products, except real property and services to real property, where the products are:

          (1) Otherwise distinct and identifiable; and

          (2) Sold for one nonitemized price.

     (b) “Bundled transaction” does not include:

          (1) The sale of any products in which the sales price varies, or is negotiable, based on the selection by the purchaser of the products included in the transaction.

          (2) The retail sale of tangible personal property and a service where the tangible personal property is essential to the use of the service and is provided exclusively in connection with the service, and the true object of the transaction is the service.

          (3) A transaction that includes taxable products and nontaxable products and regarding which the purchase price or sales price of the taxable products is de minimis. For the purposes of this subparagraph:

               (I) “De minimis” means that the seller’s purchase price or sales price of the taxable products is 10 percent or less of the total purchase price or sales price of the bundled products.

               (II) Sellers must use either the purchase price or the sales price of the products to determine if the taxable products are de minimis. Sellers may not use a combination of the purchase price and sales price of the products to determine if the taxable products are de minimis.

               (III) Sellers must use the full term of a service contract to determine if the taxable products are de minimis.

          (4) The retail sale of exempt tangible personal property and taxable tangible personal property, where:

               (I) The transaction includes food, drugs, durable medical equipment, mobility enhancing equipment, prosthetic devices or medical supplies; and

               (II) The seller’s purchase price or sales price of the taxable tangible personal property is 50 percent or less of the total purchase price or sales price of the bundled tangible personal property. Sellers may not use a combination of the purchase price and sales price of the tangible personal property for the purpose of making this 50-percent determination for a transaction.

     (c) “Distinct and identifiable” products do not include any:

          (1) Packaging items, such as containers, boxes, sacks, bags and bottles, or other materials, such as wrapping, labels, tags and instruction guides, that accompany the retail sale of the products and are incidental or immaterial to the retail sale thereof. Examples of packaging items that are incidental or immaterial to the retail sale of the products include grocery sacks, shoeboxes, dry cleaning garment bags, and express delivery envelopes and boxes.

          (2) Products provided free of charge with the required purchase of another product. For the purposes of this subparagraph, a product is “provided free of charge” if the sales price of the product purchased does not vary depending on the inclusion of the product “provided free of charge.”

          (3) Items included in the sales price.

     (d) “One nonitemized price” does not include a price that is separately identified by product on binding sales or other supporting sales-related documentation made available to the customer in paper or electronic form, including, but not limited to, an invoice, bill of sale, receipt, contract, service agreement, lease agreement, periodic notice of rates and services, rate card or price list.

     (e) “Sales price” applies to the measure subject to sales tax.

     (Added to NAC by Tax Comm’n by R021-08, eff. 4-17-2008)