Characterization refers to attribution of certain qualities or peculiarities to something. For example settlement agreements that state characterize as XYZ can refer to the certain peculiarities in such settlement agreements that mark them off from other kinds of settlements.
Minnesota Statute Section 297A.668 (Minn. Stat. § 297A.668) is an example of a Minnesota Statute characterizing a product. It says: “The provisions of this section apply regardless of the characterization of a product as tangible personal property, a digital good, or a service; but do not apply to telecommunications services or the sales of motor vehicles. These provisions only apply to determine a seller's obligation to pay or collect and remit a sales or use tax with respect to the seller's sale of a product. These provisions do not affect the obligation of a seller as purchaser to remit tax on the use of the product.”