(1) If a purchaser that uses a nontaxable transaction certificate uses the subject
of the purchase for a purpose other than one allowed as nontaxable under this chapter,
the use is considered a taxable sale as of the time of first use by the purchaser
and the sales price is the price that the purchaser paid. If the sole nonexempt use is rental while holding for sale, the purchaser shall include
in the sales price the amount of the rental charged. Upon subsequent sale of the property, the seller shall include the entire amount of
the sales price, without deduction of amounts previously received as rentals.
(2) A person that uses a certificate for property that will be used for a purpose
other than the purpose claimed is subject to a penalty, payable to the department,
of $100 for each transaction in which an improper use of a certificate has occurred.
(3) Upon a showing of good cause, the department may abate or waive the penalty or
a portion of the penalty.
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