26 CAR § 35-104. Permitted vending device operators — Manufacturers

(a) A PVDO that manufactures some or all of the goods placed in vending devices for sale shall calculate the tax based on the price that it would sell the manufactured goods to another vending device operator ("wholesale price"). (b) A PVDO that does not have a fixed wholesale price shall calculate the wholesale price based on either the: (1) Average price that it sold identical goods to wholesale customers during the reporting month; or (2)(A) Lowest price that it sold identical goods to a wholesale vending customer purchasing a similar volume of goods. (B) "Similar volume" means within ten percent (10%) of the volume of goods withdrawn for sale by the PDVO for sale through a vending device. Example 1: A PVDO manufactures soft drinks and sells the soft drinks to numerous customers during the reporting month. The PVDO also sells the soft drinks through its own vending devices. The unit price of the soft drinks sold to customers varies because of volume discounts, rebates, or other factors. The PVDO chooses to pay tax on the withdrawal of goods during the reporting month. The PVDO should base the tax on the average unit price for which the soft drinks were sold to the PVDO's customers during the reporting month. Example 2: A PVDO manufactures sandwiches and sells the sandwiches through vending devices, to other retailers, and over the counter. The PVDO also purchases ready-made goods for sale through vending devices and has elected to pay on the purchase price of these goods. When calculating the tax on the sandwiches, the PVDO may base the tax on the average wholesale price that it would sell the sandwiches to other retailers during the reporting period based on cost of the ingredients, labor, and other costs. Example 3: A PVDO manufactures sandwiches solely for sale through vending devices. The PVDO should calculate the tax on the sandwiches based on the average cost of manufacturing the goods including cost of ingredients, labor, and other factors, such as utilities, insurance, and other overhead costs that relate directly to the manufacture of sandwiches and would be taken into consideration in determining a wholesale price if the PVDO were to sell to another retailer.