Except with respect to a specific situation regarding certain
building materials, the word ``resale'' is not defined in the Act. The
common meaning of ``resale'' is the act of ``selling again.'' A sale is
made for resale where the seller knows or has reasonable cause to
believe that the goods or services will be resold, whether in their
original form, or in an altered form, or as a part, component or
ingredient of another article. Where the goods or services are sold for
resale, it does not matter what ultimately happens to such goods or
services. Thus, the fact that the goods are consumed by fire or no
market is found for them, and are, therefore, never resold does not
alter the character of the sale which is made for resale. Similarly, if
at the time the sale is made, the seller has no knowledge or reasonable
cause to believe that the goods are purchased for the purpose of resale,
the fact that the goods later are actually resold is not controlling. In
considering whether there is a sale of goods or services and whether
such goods or services are sold for resale in any specific situation,
the term ``sale'' includes, as defined in section 3(k) of the Act, ``any
sale, exchange, contract to sell, consignment for sale, shipment for
sale, or other disposition.'' Thus, under the definition sales by an
establishment to a competitor are regarded as sales for resale even
though made without profit. (Northwestern-Hanna Fuel Co. v. McComb, 166
F. 2d 932 (CA-8).) Similarly, sales for distribution by the purchaser
for business purposes are sales for resale under the ``other
disposition'' language of the definition of ``sale'' even though
distributed at no cost to the ultimate recipient. (See Mitchell v.
Duplicate Photo Service, 13 WH Cases 71, 31 L.C. Par. 70,287 (S.D. Cal.
1956) accord, Mitchell v. Sherry Corine Corporation, 264 F. 2d 831 (CA-
4) (sale of meals to airlines for distribution to their passengers).) It
should be noted, however, that occasional transfer of goods from the
stock of one retail or service establishment to relieve a shortage in
another such establishment under the same ownership will not be
considered as sales for resale.
