Richardson-Merrell, Inc. v. Porterfield

The issue in this case is the proper sales and use tax treatment of raw materials and related packaging items purchased for use in the manufacture of products for sale, which products are also partially used for other nonexempt purposes.

*283The Tax Commissioner contends that the assessment should be levied on a calculated portion of Merrell’s purchases of raw materials and related packaging items which were used to manufacture drug products. The commissioner reasoned that, because Merrell distributed approximately 8 percent of its drug products as sample products, without charge, the computed…