Answer the following in 1-3 paragraphs.

Q.1: NYS taxes the sale of Tangible Personal Property and does not tax ANY services for purposes of this question. Therefore, services are exempt from taxation (again for purposes of this question only). Barry Manilow is coming to the NEW Nassau Coliseum and Alexandra Keough, Andrea Hunter, Cassandra Perrone and Sonja Rose must have tickets to this exciting must see concert. There is even a rumor Neil Diamond will be appearing as a special guest. As such Alexandra goes online to Barry Manilow Enterprises, Inc. and pays $500 per ticket to go. Additionally, Barry Manilow Enterprises, Inc. located in NY has decided with each ticket purchased, a concert tee-shirt with all the dates of his concerts on the back of the t-shirt and a huge picture of himself on the front be issued for each ticket purchased. These shirts were ordered from a CA corporation with no nexus to NYS and were mailed by common carrier into the state. Alexandra, Andrea, Cassandra and Sonja cannot contain their excitement and have all agreed to wear these shirts to the concert. Cassandra said with all of us wearing these shirts boys watch-out! Barry Manilow feels this would be an excellent promotional item that will put his concert over the top and on a par with other major music concerts like Lady Gaga, Bon Jovi and possibly even rival Taylor Swift.

(1) NYS asserts the physical ticket which is being mailed to Alexandra is the sale of tangible personal property and asks Barry Manilow Enterprises, Inc., that has physical nexus in NYS to assess $43.12 in sales tax on each ticket. Alexandra is outraged, and is prepared to go to court because she believes that she is purchasing a service, the right to go see a concert.

(2) NYS also asserts a use tax on Barry Manilow Enterprises for giving away the promotional item of the T-shirt. Barry Manilow argues the price of the ticket incorporates the t-shirt giveaway and that this is part of the sale of the ticket (even though the t-shirt has no separate charge listed) and no use tax should be incurred to him or his corporation.

Based upon the cases we read, please analyze (1) the taxation of this ticket as a sale of tangible personal property or a service. Then analyze (2) Barry Manilows use tax issue (I am not asking about the CA Corporation, only is Barry Manilows Corporation is responsible for the use tax). Barrys Corporation has nexus with NYS and he is physically present when he performs and they have offices on Long Island. Additionally, please cite to relevant cases and any applicable tests courts have used in analyzing a service versus the sale of tangible personal property (Part 1) and who is the user of the t-shirt for the use tax issue (Part 2).

Textbook: State and Local Taxation 9th Edition