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gross volume of sales will include the gross amount of the sale before deduction of the allowance on such trade-in merchandise. When the trade-in merchandise is in turn sold by the enterprise, the amount of that sale will be included in its annual gross volume of sales. The computation of the annual gross volume of sales of the enterprise is made "exclusive of excise taxes at the retail level which are separately stated." The taxes which may be excluded are discussed in sections 779.263-779.266. The methods of calculating the annual gross volume of sales of an enterprise are set forth in sections 779.267-779.273.
contained in section 779.24 and is discussed in Subpart D of this part. Whether composed of one or more establishments, an enterprise will come within the scope of section 3(s) (1) if it has at least one retail or service establishment” and if the enterprise meets all the other conditions of that section. Section 779.247-THIRD CONDITION OF
A 3(s) (1) ENTERPRISE; HAVING $1,000,000 OR
MORE IN ANNUAL GROSS VOLUME OF SALES
To come within the scope of section 3(s) (1), the "enterprise”, in addition to the other conditions, must have an annual gross volume of sales of not less than $1,000,000 exclusive of excise taxes at the retail level which are separately stated. If the annual gross volume of sales of the enterprise is less than the stated amount it will not come within the scope of section 3(s) (1). Section 779.248_WHAT SALES ARE INCLUDED IN ANNUAL GROSS VOLUME
The annual gross volume of sales of an enterprise consists of its gross receipts from all types of sales during a 12-month period. The gross volume of sales means the gross volume derived from all sales transactions including, for example, income from service, credit, or other similar charges. Credits for goods returned or exchanged and rebates and discounts, and the like, are not ordinarily included in the annual gross volume of sales. The gross volume of sales includes the receipts from sales made by the retail or service establishments of the enterprise as well as the sales made by any other establishments of the enterprise. The dollar volume of sales of the entire business in all establishments is added together to determine whether the million dollar test is met. The fact that one or more of the retail or service establishments of the enterprise may have less than $250,000 in annual sales and may meet the other requirements for exemption from the pay provisions of the Act under section 13(a) (2), does not exclude the dollar volume of sales of that establishment from the annual gross volume of sales of the enterprise. Where merchandise is taken in trade when a sale is made, the annual
Section 779.249_FOURTH CONDITION OF
3(s)(1) ENTERPRISE; INFLOW TEST
To come within the scope of section 3(s) (1) the enterprise, in addition to the other conditions, must purchase or receive goods for resale that move or have moved across State lines (not in deliveries from the reselling establishment) which amount in total annual volume to $250,000 or more. To meet this condition, it must be shown that (a) the enterprise purchases or receives goods for resale (section 779.251) and (b) that such goods move or have moved across State lines (section 779.252); and (c) that such purchases and receipts amount in total annual volume to $250,000 or more (section 779.256).
Section 779.250_"GOODS" DEFINED The term "goods” is defined in section 3(i) of the Act. The statutory definition is quoted in section 779.14.
Section 779.251-PURCHASE OR RECEIVE
"GOODS FOR RESALE"
(a) Goods will be considered purchased or received "for resale” if they are purchased or received with the intention of being resold. This includes goods, such as stock in trade which is purchased or received by the enterprise for resale in the ordinary course of business. It does not include machinery, equipment, supplies and other goods which the enterprise purchases to use in conducting its business. This is true even if such capital goods or other equipment, which the enterprise originally purchased for use in conducting its business, are at some
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 partic. reselling 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
Section 779.253_GOODS THAT HAVE by the enterprise "for resale”, even if such goods
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 resa le”. 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 mored" 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 goods have moved across State lines and the time by the enterprise within the State will not be
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 goods have moved across State lines in the ordi from outside the State, had been processed or nary course of trade before resale by the en manufactured so as to have lost their identity terprise. 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.
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 779.256—WHAT 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 Section 779.259_A GASOLINE SERVICE gasoline service station or establishment is one
ESTABLISHMENT which is typically a physically separate place of
Under section 3(s) (5) the enterprise is albusiness engaged primarily in selling gasoline and lubricating oils to the general public at the
ways a single establishment-a gasoline service
establishment, even though such establishment station or establishment. It may also sell other
may be a part of some larger enterprise for purmerchandise or perform minor repair work as
poses of other provisions of the "enterprise" covan incidental part of the business. (See S.
erage of the new amendments. As noted above Rept. 145, 87th Cong., 1st Sess., p. 32.)
this term refers to what is commonly known as (c) Scope of exemption. The 1961 amend
a gasoline service station, a separate "establishments bring under the minimum wage and child
ment”. What constitutes a separate establishlabor provisions, but not the overtime provi
ment is discussed in sections 779.302-779.306. sions, of the Act any gasoline service station or
While receipts from incidental sales and servestablishment which has an annual gross volume
ices are included and counted in determining of sales of not less than $250,000 exclusive of
the establishment's annual gross volume of sales certain excise taxes. A gasoline service station
for purposes of section 3(s) (5), the establishwhose annual gross volume of sales is less than
ment's primary source of receipts must be from $250,000 (exclusive of the described excise
the sale of gasoline and lubricating oils. (See taxes) will continue to be exempt from the mini
Senate Report cited in section 779.257.) An mum wage and overtime provisions if it meets
establishment which derives the greater part of all the requirements for exemption in section
its income from the sales of goods other than 13(a) (2), which defines and exempts certain gasoline or lubricating oils will not be conretail or service establishments. The 13(a) (2) sidered a “gasoline service establishment” withexemption will be applicable to the station even
in the meaning of section 3(s) (5). The mere if it is part of an enterprise described in section fact that an establishment has a gasoline pump 3(s) (1) which has more than $1,000,000 in
as an incidental part of other business activities annual gross volume of sales including the sales
in which it is principally engaged does not of the gasoline service establishment. The re
constitute it "a gasoline service establishment” quirements of section 13(a) (2) are described in
within the meaning of section 3(s) (5). sections 779.336 through 779.340.
Section 779.260_FIRST CONDITION FOR Section 779.258_CONDITIONS TO BE
COVERAGE OF 3(s)(5) ENTERPRISE; MET BY A 3(s) (5) ENTERPRISE
ENGAGED IN COMMERCE OR IN THE Section 3(s) (5) of the Act sets forth the PRODUCTION OF GOODS FOR COM
MERCE following conditions that must be met for a gasoline service establishment to be an “enter
The requirement that the enterprise must be prise engaged in commerce or in the production
"an enterprise engaged in commerce or in the of goods for commerce":
production of goods for commerce" is discussed (a) It must have employees engaged in com in sections 779.237-779.243. Those sections exmerce or in the production of goods for com
plain which employees are engaged in commerce merce, including employees handling, selling,
or in the production of goods for commerce, or otherwise working on goods that have been
including employees, handling, selling, or othermoved in or produced for commerce by any
wise working on goods that have been moved
in or produced for commerce by any person. In (b) It must have an annual gross volume of connection with the discussion in those sections sales of not less that $250,000 (exclusive of ex as it concerns employees of gasoline service cise taxes at the retail level which are separately establishments, it should be noted that as a genstated).
eral rule such employees normally are "engaged
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 779.262-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 workweek 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.
Section 779.261-SECOND CONDITION
FOR COVERAGE OF 3(s)(5) ENTER-
(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 779.263-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: