Are there exceptions to the general bundling rule?

Yes. There are a number of exceptions to the general bundling rules:

• Selected items When the price of the transaction changes based on what the customer chooses to include in the purchase, this is not a bundle. The price change means it is not being sold at a non-itemized price.
  
  Example:An information technology company enters into a multi-year contract with its purchaser to provide information technology services (data processing, help desk, software installation, and Web hosting) from the provider’s data processing facility. Through negotiation, the provider and the purchaser agree on the services to be provided and the price. The price is a function of the mix of services to be provided. The provider bills one non-itemized price on its invoice to the purchaser. Because the price of products being sold varied or was negotiated as a result of the selection by the purchaser of the products included in the transaction, no bundled transaction exists.

1. True object exception:When the true object of the sale is a non-taxable service, the tangible personal property, digital products, or services used exclusively in connection with the non-taxable service are not a bundled transaction.
   
   Example 1: (taxable property used to perform non-taxable service): Having your hair colored by a hair stylist is a non-taxable service. The stylist uses a taxable product, hair dye, to complete the service. Using the hair dye to perform the non-taxable service does not subject the hair coloring to sales tax. The services performed by the hairstylist are still not subject to sales tax.
   
   Example 2: (taxable service used with non-taxable service): A party facility is rented to host a gathering and the facility includes access to a parking lot for the cars of guests and those working. Parking is a taxable service, while the rental of the facility is not subject to sales tax. The inclusion of the parking lot does not subject the facility rental to sales tax. This is not a bundled transaction.

2. De minimis exception: A transaction that would otherwise be a bundled transaction is not a bundled transaction if the taxable product(s) amount to ten percent (10%) or less of the total sales price.

3. Food, drug and medical exception:The transaction that would otherwise be a bundled transaction is not a bundled transaction if the transaction includes food, drugs or medical items and the sales price of the taxable tangible personal property is fifty percent (50%) or less of the total sales price of all of the bundled products.
   
   Example: Giftco sells a gift basket with food where the cost of the food constitutes more than 50% of the total cost to the seller of the food and the basket. The taxable amount would be the cost of the basket to the seller. Conversely, if the cost of the food constituted less than 50% of the total cost of the items sold, the transaction would be a bundled transaction and the entire sales price of the gift basket would be taxable.

4. Digital code to purchase several products: Tax generally applies to the entire sales price of the code if the code allows the purchase of goods, digital products or services that are taxable and non-taxable. However, if the seller can determine which goods, purchased using the code, are subject to tax and the products that are not subject to tax, sales and use tax will not apply to the goods, digital products or services that are not normally subject to tax. The seller must identify the tax treatment by reasonable and verifiable standards by using their books and records kept in the regular course of business.