Under a "Component Part/physical Ingredient" Rule for Determining the Exemption

question 7

Multiple Choice

Under a "component part/physical ingredient" rule for determining the exemption of business purchases under a state sales and use tax, which of the following purchases would probably not be exempt from the sales tax?

• A) Purchase by a local clothing store of shirts for resale to customers.
• B) Purchase by Chrysler Corporation of tires to be placed on Dodge vans for sales to the public
• C) Purchase of sesame seed buns by a McDonald's restaurant.
• D) Purchase of clothing display racks by a local clothing store.