Agency, not sale, in advertisement block arrangements: commission was brokerage and sales tax liability failed.

An advertising intermediary that arranged preparation of blocks and earned commission was held to be acting as an agent for disclosed principals, not as a purchaser and seller on its own account. The order forms authorised it to contract and release advertisements for identified clients, and the blocks were prepared for those clients' use. The commission retained was brokerage for services and did not create a sale between the block-makers and the intermediary. As there was no dominion or proprietary dealing as a trader, sales tax liability as a dealer could not be sustained.

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Issues: Whether the appellant, in arranging preparation of blocks for advertisements and earning commission on the transactions, acted as a purchaser and seller of the blocks so as to be liable to sales tax, or merely as an agent for disclosed principals.

Analysis: The order forms authorised the appellant to contract and release advertisements on behalf of the clients, and the clients were disclosed to the block-makers. On these facts, the contractual arrangement was one of agency, not a contract of sale between the block-makers and the appellant as principal. The commission retained by the appellant represented brokerage for services rendered and did not convert the appellant into a buyer or seller of the blocks. The blocks were prepared for the specific clients' use and had no independent market utility to the appellant, which negated the inference of dominion or proprietary dealing as a trader.

Conclusion: The appellant was not a dealer buying and selling the blocks as principal, and the sales tax demand could not be sustained.

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