(a) Section 3(k) of the Act provides that ``Sale'' or ``sell'', as
used in the Act, ``includes any sale, exchange, contract to sell,
consignment for sale, shipment for sale, or other disposition.'' Since
``goods'', as defined, includes any part or ingredient of goods (see
Sec. 779.14), a ``resale'' of goods includes their sale in a different
form than when first purchased or sold, such as the sale of goods of
which they have become a component part (Arnold v. Kanowsky, 361 U.S.
388). The Act, in section 3(n), provides one exception to this rule by
declaring that ``resale'', as used in the Act, ``shall not include the
sale of goods to be used in residential or farm building construction,
repair, or maintenance: Provided, That the sale is recognized as a bona
fide retail sale in the industry.'' A resale of goods is not confined to
resale of the goods as such, but under section 3(k) may include an
``other disposition'' of the goods in which they are disposed of in a
transaction of a different kind; thus the sale by a restaurant to an
airline of prepared meals to be served in flight to passengers whose
tickets entitle them to a ``complimentary'' meal is a sale of goods
``for resale''. (Mitchell v. Sherry Corine Corp., 264 F 2d 831 (C.A. 4),
cert. denied 360 U.S. 934.)
(b) In construing section 3(s)(1) of the Act as it was prior to the
1966 amendments it should be noted that section 3(n) of the prior Act
defined ``resale'' by declaring that this term, ``except as used in
subsection (s)(1), shall not include the sale of goods to be used in
residential or farm building construction, repair, or maintenance:
Provided, That the sale is recognized as a bona fide retail sale in the
industry.'' Thus, although section 3(n) of the prior Act also provided
the one exception to the meaning of ``resale'', it made clear that the
exception was inapplicable in determining under section 3(s)(1) of the
prior Act, ``if such enterprise purchases or receives goods for resale
that move or have moved across State lines (not in deliveries from the
reselling establishment) which amount in total volume to $250,000 or
more''. The application of the inflow test under section 3(s) (1) of the
prior Act is discussed fully in subpart C of this part.
