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later date actually resold. The distinction is to supplier. In many instances these goods may be found in whether the goods are purchased or have been stored at the supplier's establishment received by the enterprise with the intention of for some time. However, as long as the particreselling them in the same form or after further ular goods purchased have moved across State processing or manufacturing, or whether they lines at some stage in the flow of trade to the are purchased with the intent of being consumed retailer, they would have to be included in deteror used by the enterprise itself in the perform mining whether or not the enterprise has purance of its activities.
chased or received for resale such out-of-State (b) Goods, such as raw materials or in goods amounting to $250,000. gredients, are considered purchased or received by the enterprise "for resale”, even if such goods
Section 779.253—GOODS THAT HAVE
NOT LOST THEIR OUT-OF-STATE are purchased or received for the purpose of
IDENTITY being processed or used as parts or ingredients in the manufacture of other goods which the en
Goods which are purchased or received by the terprise intends to sell. For example, where
enterprise from within the State will be conthe enterprise purchases flour for use in baking
sidered goods which "have moved across State bread or pastries for sale, the goods will be con
lines” if they have previously been moved across sidered to have been purchased "for resale”. It
State lines and have not lost their identity as is immaterial whether the goods will be resold
out-of-State goods before they are purchased by the enterprise at retail or at wholesale.
or received by the enterprise. Also goods which
have been assembled within the State after they Section 779.252-GOODS WHICH MOVE OR
were moved across State lines but before they HAVE MOVED ACROSS STATE LINES
are purchased or received by the enterprise will In order to be included in the annual dollar still be regarded as goods which "have moved volume for purposes of this test, the goods across State lines.” Such goods are still identiwhich the enterprise purchases or receives for fiable as goods brought into the State. This is resale must be goods that "move or have moved also true in certain cases where goods are procacross State lines." Goods which have not essed to some extent without losing their identity moved across State lines before they are resold as out-of-State goods. For example, out-ofby the enterprise will not be included. The State furniture or television sets which are put movement to which the phrase "move or have
together within the State, or milk from outside moved" has reference is that movement which the State which is pasteurized and bottled the goods follow in their journey to the enter within the State, before being purchased or reprise or within the enterprise to the establish ceived by the enterprise, are goods which “have ment which sells the goods. Thus, if goods have moved across State lines.” They have already moved across State lines at some stage in the flow moved across State lines and they retain their of trade before they are actually sold by the out-of-State identity, despite the assembly or enterprise, they will be considered to have
processing within the State. moved across State lines. It is not material that
Section 779.254-GOODS THAT HAVE the goods may have "come to rest” at some time
LOST THEIR OUT-OF-STATE IDENbefore they are purchased or received and sold
TITY by the enterprise; nor is it material that some
(a) Goods which are purchased or received time may have elapsed between the time the
by the enterprise within the State will not be goods have moved across State lines and the time
considered goods which have "moved across they are purchased or received and sold by the enterprise. It is sufficient if at any time such State lines” if the goods, although they came
from outside the State, had been processed or goods have moved across State lines in the ordi
manufactured so as to have lost their identity nary course of trade before resale by the enterprise. Much of the goods purchased by as out-of-State goods before they are purchased retailers are procured from a local intrastate or received by the enterprise. This assumes, of
volume to $250,000 or more.” It will be noted that taxes are not excluded in measuring this annual dollar volume. Thus, the total cost to the enterprise of such goods will be included in calculating the $250,000. This will include all taxes and other charges which the enterprise must pay for such goods. Generally, all charges will be included in the invoice of the goods. But whether included in the invoice or not, the total amount which the enterprise is required to pay for such goods, including charges for transportation, insurance, delivery, storage and any other will be included in computing the $250,000. The dollar volume of the goods purchased or received by the enterprise is the "annual" volume. The method of calculating the annual dollar volume is explained in section 779.267.
THE GASOLINE SERVICE ESTABLISHMENT 3(s)(5) ENTERPRISE
course, that the goods so manufactured or processed do not move across State lines before they are sold by the enterprise. Thus where an enterprise buys bread baked within the State which does not move across State lines before it is resold by the enterprise, the bread is not "goods which have moved across State lines" even if the flour and other ingredients came from outside the State. The same conclusion will follow, under the same circumstances, where clothing is manufactured from out-ofState fabrics.
(b) In those cases where goods are composed in part of goods which have, and in part of goods which have not, moved across State lines, the entire product will be considered as goods which have moved across State lines, if, as a practical matter, it substantially consists of goods which are identifiable as out-of-State goods. Whether goods have been so changed as to have lost their out-of-State identity is a question which will depend upon all the facts in a particular case. Section 779.255_NOT IN DELIVERIES
FROM THE RESELLING ESTABLISHMENT
Goods which move across State lines only in the course of deliveries from the reselling establishment of the enterprise are not included as goods which "move or have moved across State lines.” Thus, goods delivered by the enterprise to its customers outside of the State are not, for that reason, considered goods which "move or have moved across State lines.” The purpose of the provision excepting "deliveries from the reselling establishment” is to limit the test to goods which flow into the enterprise and to exclude those goods which only cross State lines when they flow out of the enterprise as an incident of the sale of such goods by the enterprise. In other words, this is an inflow test and not an outflow test.
Section 779.257-GASOLINE SERVICE ESTABLISHMENTS AS AN "ENTERPRISE ENGAGED IN COMMERCE”
(a) Statutory provisions. Section 3 of the Act contains the following special provisions with respect to gasoline service establishments:
(s) Enterprise engaged in commerce or in the production of goods for commerce means any of the following in the activities of which employees are so engaged, including employees handling, selling, or otherwise working on goods that have been moved in or produced for commerce by any person :
(5) any gasoline service establishment if the annual gross volume of sales of such establishment is not less than $250,000, exclusive of excise taxes at the retail level which are separately stated :
Section 779.256WHAT IS INCLUDED IN
COMPUTING THE TOTAL ANNUAL INFLOW VOLUME
The goods which the establishment purchases or receives for resale that move or have moved across State lines must "amount in total annual
In addition, section 13(b)(8) of the Act provides a specific exemption from the overtime pay provisions of section 7 of the Act for any employee of a gasoline service station."
(b) Meaning of "gasoline service establishment." The Senate Report states as follows: Although the term "gasoline service establishment" is used in section 3(s) (5), and the term "gasoline service station” in section 13(b) (8), no difference in application is intended. (See
S. Rept. 145, 87th Cong., 1st Sess., p. 32.) A gasoline service station or establishment is one which is typically a physically separate place of business engaged primarily in selling gasoline and lubricating oils to the general public at the station or establishment. It may also sell other merchandise or perform minor repair work as an incidental part of the business. (See S. Rept. 145, 87th Cong., 1st Sess., p. 32.)
(c) Scope of exemption. The 1961 amendments bring under the minimum wage and child labor provisions, but not the overtime provisions, of the Act any gasoline service station or establishment which has an annual gross volume of sales of not less than $250,000 exclusive of certain excise taxes. A gasoline service station whose annual gross volume of sales is less than $250,000 (exclusive of the described excise taxes) will continue to be exempt from the minimum wage and overtime provisions if it meets all the requirements for exemption in section 13(a) (2), which defines and exempts certain retail or service establishments. The 13(a) (2) exemption will be applicable to the station even if it is part of an enterprise described in section 3(s) (1) which has more than $1,000,000 in annual gross volume of sales including the sales of the gasoline service establishment. The requirements of section 13(a) (2) are described in sections 779.336 through 779.340. Section 779.258-CONDITIONS TO BE
MET BY A3(s) (5) ENTERPRISE Section 3(s) (5) of the Act sets forth the following conditions that must be met for a gasoline service establishment to be an “enterprise engaged in commerce or in the production of goods for commerce":
(a) It must have employees engaged in commerce or in the production of goods for commerce, including employees handling, selling, or otherwise working on goods that have been moved in or produced for commerce by any
Section 779.259—A GASOLINE SERVICE
ESTABLISHMENT Under section 3(s) (5) the enterprise is always a single establishment-a gasoline service establishment, even though such establishment may be a part of some larger enterprise for purposes of other provisions of the “enterprise" coverage of the new amendments. As noted above this term refers to what is commonly known as a gasoline service station, a separate “establishment”. What constitutes a separate establishment is discussed in sections 779.302-779.306. While receipts from incidental sales and services are included and counted in determining the establishment's annual gross volume of sales for purposes of section 3(s) (5), the establishment's primary source of receipts must be from the sale of gasoline and lubricating oils. (See Senate Report cited in section 779.257.) An establishment which derives the greater part of its income from the sales of goods other than gasoline or lubricating oils will not be considered a “gasoline service establishment” within the meaning of section 3(s)(5). The mere fact that an establishment has a gasoline pump as an incidental part of other business activities in which it is principally engaged does not constitute it “a gasoline service establishment” within the meaning of section 3(s)(5). Section 779.260_FIRST CONDITION FOR
COVERAGE OF 3(s)(5) ENTERPRISE; ENGAGED IN COMMERCE OR IN THE PRODUCTION OF GOODS FOR COMMERCE
The requirement that the enterprise must be "an enterprise engaged in commerce or in the production of goods for commerce" is discussed in sections 779.237-779.243. Those sections explain which employees are engaged in commerce or in the production of goods for commerce, including employees, handling, selling, or otherwise working on goods that have been moved in or produced for commerce by any person. In connection with the discussion in those sections as it concerns employees of gasoline service establishments, it should be noted that as a general rule such employees normally are “engaged
(b) It must have an annual gross volume of sales of not less that $250,000 (exclusive of excise taxes at the retail level which are separately stated).
stated.” Where a gasoline station posts a sign on or alongside the gasoline pumps indicating that a certain amount per gallon is for a specific excise tax, this will meet the requirement of being "separately stated”. The method of calculating annual gross volume of sales is explained in greater detail in sections 779.267– 779.273.
in commerce or in the production of goods for commerce” within the meaning of the Act. For example, gasoline filling station employees servicing motor vehicles used in interstate transportation or in the production of goods for commerce have always been regarded as being “engaged in commerce or in the production of goods for commerce” within the meaning of the Act. Such employees will also be considered as engaged in handling, selling or otherwise working on goods that have been moved in or produced for commerce by any person, if the gasoline or lubricating oils or the other goods with respect to which they perform the described activities have come from outside the State in which the establishment is located.
Section 779.261—SECOND CONDITION
FOR COVERAGE OF 3(s)(5) ENTERPRISE; $250,000 TEST
(a) A gasoline service establishment will come within the scope of section 3(s) (5) of the Act only if its annual gross volume of sales is not less than $250,000, exclusive of excise taxes at the retail level which are separately stated. A gasoline service establishment which does not have such an annual gross volume of sales is not a 3(s) (5) enterprise. In determining whether the establishment has the requisite annual gross volume of sales the receipts from all sales of the establishment are included without limitation to the receipts from sales of gasoline and lubricating oil. In computing the annual gross volume of sales the gross receipts from all types of sales during a 12-month period are included. A further discussion of what sales are included in the annual gross volume is contained in section 779.248 of this Interpretative Bulletin.
(b) In computing the annual gross volume of sales, excise taxes at the retail level which are separately stated are not counted. A discussion of the excise taxes which may be excluded under this provision is contained in sections 779.263–779.266. Whether the particular taxes are "excise taxes at the retail level” depends upon the facts in each case. If the taxes are "excise taxes at the retail level" they will be excludable only if they are "separately
Section 779.262-EXEMPTION FROM OVERTIME UNDER SECTION 13(b) (8)
Section 13(b) (8) of the Act exempts from the overtime requirements only, “any employee of a gasoline service station.” This exemption will be applicable without regard to the annual gross volume of sales of the gasoline service station by which the employee is employed. To be exempt under section 13(b) (8) an employee must be an “employee of” a gasoline service station. As noted in section 779.257, the term "gasoline service station" as used in section 13(b) (8) and the term "gasoline service establishment” as used in section 3(s) (5) refer to the same type of establishment. Therefore the exemption under section 13(b) (8) will be applicable to any employee who is employed by an establishment which is commonly known as a "gasoline service station.” The scope and meaning of this term are discussed in section 779.259. If the employee is employed by such an establishment he will be regarded as an "employee of” that establishment and will be exempt from the overtime requirements of the Act under section 13(b) (8) in any work week in which he is so employed. A discussion of which employees are considered to be an "employee of” an establishment is contained in section 779.307.
EXCISE TAXES Section 779.263-STATUTORY PROVISION
Sections 3(s) (1), 3(s) (2), 3(s) (5) and 13 (a) (2) (iv) provide for the exclusion of “excise taxes at the retail level which are separately stated” in computing the gross annual volume of sales or the annual dollar volume of sales for purposes of the provisions contained in those sections. The Senate Committee report states as follows with respect to this provision:
** * in determining whether the enterprise or establishment, as the case may be, has the requisite annual dollar volume of sales, excise taxes will not be counted if they are taxes that are collected at the retail level and are separately identified in the price charged the customer for the goods or services at the time of the sale. Excise taxes which are levied at the manufacturer's, wholesaler's, or other distributive level will not be excluded in calculating the dollar volume of sales nor will excise taxes be excluded in cases where the customer is charged a single price for the merchandise or services and the taxes are not separately identified when the sale is made. (S. Rept. 145, 87th Cong., 1st Sess., p. 39.)
which State taxes are levied at the retail level, and thus excludable when separately stated, depends, of course, upon the law of the State concerned. However, as a general rule, State, county and municipal sales taxes are levied at the retail level, and to the extent that they are separately stated, may be excluded. Similarly, some State taxes on gasoline are levied at the retail level.
In applying the above rules to determine annual gross volume of sales under section 3(s) or annual dollar volume of sales under section 13(a) (2) (iv), excise taxes which (a) are levied at the retail level and (b) are separately stated and identified in the charge to the customer at the time of sale need not be included in the calculation of the gross or dollar volume of sales. Excise taxes which are levied at the manufacturer's, wholesaler's, or other distributive level will not, ordinarily, be excluded in calculating the volume of sales, nor will excise taxes, even if levied at the retail level, be excluded in cases where the customer is charged a single price for the merchandise or services and the taxes are not separately identified when the sale is made. Excise taxes will be excludable whether they are levied by the Federal, State, or local government provided that the tax is "levied at the retail level" and "separately stated."
Section 779.265-EXCISE TAXES NOT AT
THE RETAIL LEVEL There are also a wide variety of taxes levied at the manufacturer's or distributor's level and not at the retail level. It should be noted, however, that the circumstances surrounding the levying and collection of taxes must be carefully considered. In some cases these circumstances may reflect that despite the fact that such taxes may be levied upon the manufacturer or distributor, nevertheless they may be, in practical operation, taxes at the retail level and may be so regarded for the purpose of this provision. For example, the circumstances surrounding the levying and collection of the federal excise taxes on gasoline reflect that, although they are listed under the title of “Manufacturers Excise Taxes”, they are, in practical operation, taxes "at the retail level.” Federal excise taxes on gasoline, when "separately stated”, may therefore be excluded in computing the annual gross volume of sales of a gasoline service station for the purpose of determining coverage under section 3(s) (5) of the Act.
[26 F.R. 11802, Dec. 8, 1961)
Section 779.264-EXCISE TAXES AT THE
RETAIL LEVEL Federal excise taxes are imposed at the retail level on a wide variety of items set forth at 26 U.S.C. 4001-56. Included in this category are excise taxes, generally at 10 percent of the price at which they are sold, on various types of jewelry and related items, furs, toilet preparations and luggage. Excise taxes are also levied at the retail level on any liquid fuel sold for use, or used in a diesel-powered highway vehicle. A similar tax is imposed on the sale of such special motor fuels as benzene and liquefied petroleum gas when used as a motor fuel. To the extent that these taxes are separately stated to the customer, they may be excluded from gross volume of sales. The extent to
Section 779.266-EXCISE TAXES SEPA
RATELY STATED A tax is separately stated where it clearly appears that it has been added to the sales price as a separate, identifiable amount, even though there was no invoice or sales slip. In the absence of a sales slip or invoice, the amount of the tax may either be separately stated orally at the time of sale, or visually by means of a poster or other sign reasonably designed to inform the purchaser that the amount of the tax, either as a stated sum per unit or measured by the gross amount of the sale, or as a percentage of the price, is included in the sales price.