The Tennessee Court of Appeals held that a commercial printing company’s sales of bank checks and other printed products were subject to Tennessee sales tax even though the products ultimately were sent to out-of-state destinations. Under the company’s standard sales contracts, title to the products it sold transferred in Tennessee when the company tendered its shipments to USPS or a common carrier. The court concluded that the sales were not of products manufactured in Tennessee for export, and thus did not qualify for the manufactured for export exemption from sales tax.
The court also concluded that the company’s sales of “blow-in cards” inserted into magazines did not qualify for a sale for resale exemption. Because the cards were placed in magazines for advertising purposes, and were meant to be torn out and returned to the company, the court determined that the cards did not become “component parts” of the finished magazines.