intangible property transfers or licenses. A common transaction subject to sales tax is license of "shrink wrap" software. State courts have often found that numerous transfers of intangible rights are to be considered subject to sales tax where not specifically exempted. Sales for resale All states exempt from sales or use tax purchases of goods made for resale in the same form. In many states, resale includes rental of the purchased property. Where the purchased property is not exactly the property resold, the purchase may be taxable. Further, use of the property before sale may defeat the resale exemption. Goods purchased for free distribution may be taxed on purchase in some states, and not in others. Goods purchased to be used as ingredients in manufacturing tangible personal property are generally not taxable. Purchases of food by a restaurant generally are not taxable in those states that tax sales by restaurants, even though the ingredients are transformed. Steel purchased to be part of machines is generally not taxable. However, supplies consumed by the same businesses may be taxable. Criteria vary widely by state. Purchase of goods to be provided as part of performance of services may be taxed. Airlines and hotels may be taxed on purchases of food to be provided as part of their services, such as in-flight meals or free breakfast. Where there is a separate charge for such goods, they may be considered purchased for resale. Distinguishing goods from nontaxable items Since services and intangibles are typically not taxed, the distinction between a taxable sale of tangible property and a nontaxable service or intangible transfer is a major source of controversy. Many state tax administrators and courts look to the "true object" or "dominant purpose" of the transaction to determine if it is a taxable sale. Some courts have looked at the significance of the property in relation to the services provided. Where property is sold with an agreement to provide service (such as an extended warranty or service contract), the service agreement is generally treated as a separate sale if it can be purchased separately. Michigan and Colorado courts have adopted a more holistic approach, looking at various factors for a particular transaction. Collection, payment and tax returns Sales taxes are collected by vendors in most states. Use taxes are self assessed by purchasers. Many states require individuals and businesses who regularly make sales to register with