Sec. 03.06.01.21. Time of Collection

A. A sale is a transaction for the present or future transfer of title or possession of tangible personal property, or for the performance of certain services, for a consideration, and the tax imposed on a retail sale applies when the transaction is entered into, regardless of when the consideration is to be paid, the tangible personal property is to be delivered, or the services are to be performed. Except as provided by this regulation or for a rental or lease, the vendor shall collect the tax from the buyer when the sale occurs.

B. Exception for Certain Credit or Installment Sales.

(1) If a vendor makes a credit or installment sale of tangible personal property which the vendor must manufacture, custom-alter, or order from a third party, collection of the tax may be deferred at the option of the vendor until the property is delivered. Among other things, this exception does not apply to a sale, such as a lay-away sale, when delivery of existing property in the possession of the vendor is delayed pending full payment.

(2) The vendor may not defer collection of the tax beyond the time of full payment for or delivery of the property, whichever occurs first. A vendor obligated to make more than one delivery as a result of a single sale of property which the vendor must manufacture, custom-alter, or order from a third party may defer collection of the tax on the portion of the price attributable to each delivery until payment of that portion of the price or the date of that delivery, whichever occurs first.

(3) If a sale as to which a vendor has elected to defer collection of the tax is cancelled and, for any reason, less than the full amount of any payment is returned to the buyer, the vendor shall allocate the amount retained as between taxable price and tax and remit that tax with the next return to the Comptroller.

(4) The authority to defer collection of the tax created by this section does not affect the nature or amount of the vendor's or buyer's liability as created at the time of entering into a transaction, but only affects the time of collection of the tax. Thus, for example, if between the time of sale and the time of delivery, a change in the rate of tax should occur, the original rate of tax shall apply.