The first test specified in section 13 (a)(2) is that more than 50
percent of the sales of goods or of services (or of both) of a ``retail
or service establishment'' (Measured by annual dollar volume) must be
made ``within the State in which the establishment is located''. This
limitation means that such establishment must be primarily engaged (more
than 50 percent) in selling to or serving customers within its State. If
the establishment is engaged to the extent of 50 percent or more in
selling to or serving customers outside the State of its location, the
requirement is not met and the establishment cannot qualify for
exemption.
