(a) General. In determining, for purposes of the section 13(a)(2)
and (4) exemptions, whether 75 percent of the annual dollar volume of
the establishment's sales which are not for resale and are recognized as
retail in the industry, such sales will be considered to include all
sales of lumber and building materials by the establishment which meet
all the requirements for such classification as previously explained in
this subpart, but will not be considered to include the transactions
noted in paragraphs (b) and (c) of this section, which do not meet the
statutory tests:
(b) Transactions not recognized as retail sales. (See Secs. 779.314
through 779.329.) Dollar volume derived from the following is not made
from sales or services which are recognized as retail in the industry:
(1) Contracts to build, maintain, or repair buildings or other
structures, or sales of services involving performance of typical
construction activity or any other work recognized as an activity of a
contracting business rather than a function of a retail merchant;
(2) Sales of lumber and building materials in which the seller
agrees to install them for the purchaser, where the installation is not
limited to services that are merely incidental to the sale and delivery
of such materials but includes a substantial amount of activity such as
construction work which is not recognized as retail (for example, sale
and installation of roofing, siding, or insulation). A sale of such
materials which would otherwise be recognized as retail (contracts
described in paragraph (b)(1) of this section are outside this category)
may be so recognized notwithstanding the installation agreement,
however, to the extent that the sales value of the materials is
segregated and separately identified in the transaction;
(3) Sales in direct carload shipments; that is, where the materials
are shipped direct in carload lots from the dealer's supplier to the
dealer's customer;
(4) Sales of specialized goods (some examples are logs, ties,
pulpwood, telephone poles, and pilings). Such specialized items are of
the type which the general consuming public does not ordinarily have
occasion to use (cf. Sec. 779.318 and Mitchell v. Raines, 238 F. 2d
186), and the sales of such items are not recognized as retail in the
industry;
(5) Sales made pursuant to formal bid procedures, such as those
utilized by the Federal, State, and local governments and their
agencies, involving the issuance by the buyer of a formal invitation to
bid on certain merchandise for delivery in accordance with prescribed
terms and specifications.
(c) Sales for resale. (See Secs. 779.330-779.336.) Examples of sales
which cannot be counted toward the required 75 percent because they are
for resale include:
(1) Sales of lumber and building materials sold to other dealers for
resale in the same form;
(2) Sales to industrial concerns for resale in any altered form or
as a part or ingredient of other goods;
(3) Sales to contractors or builders for use in the construction,
repair, or maintenance of commercial or industrial structures or any
other structures not specifically included in section 3(n) of the Act
(Sucrs. de Mayal v. Mitchell, 280 F. 2d 477, certiorari denied 364 U.S.
902; and see Arnold v. Kanowsky, 361 U.S. 388, 394, footnote 10, and
Secs. 779.335-779.336);
(4) Transfers of goods by an employer, who is a dealer in lumber and
building materials and who also acts in the capacity of a building
contractor or speculative builder, from or through his building
materials establishment to his building business for the construction
maintenance, or repair of commercial property or any other property not
excepted in section 3(n) of the Act. (See Sec. 779.336.)
