Laws, Regulations & Annotations

Business Taxes Law Guide – Revision 2018

Sales And Use Tax Court Decisions

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Atari, Inc. v. State Board of Equalization . . . (1985)

Purchase of Catalogs for Advertising Not Exempt as Marketing Aids

Taxpayer purchased catalogs to include in each video game system and cartridge sold to customers. These catalogs described taxpayer's other video game cartridges available for purchase. The Board assessed use tax on the purchase prices of the catalogs. Taxpayer argued that it purchased the catalogs for resale as marketing aids under Regulation 1670(c). The Court of Appeal held that taxpayer was barred from contending the catalogs were purchased for resale when that issue was not raised in taxpayer's claim for refund. The court also held that the evidence supported the trial court's finding that the catalogs were advertisements for taxpayer's own use and benefit, and were not sold with the cartridges as marketing aids. Accordingly, the court held in favor of the Board. Atari, Inc. v. State Board of Equalization (1985) 170 Cal.App.3d 665.