Laws, Regulations & Annotations
Business Taxes Law Guide – Revision 2017
Sales And Use Tax Court Decisions
Pope v. State Board of Equalization . . . (1988)
Taxpayer sold motor homes to out-of-state purchasers, and the contracts required shipment out of state. Taxpayer delivered the motor homes to a forwarding agent who in turn secured a one-way trip permit and delivered the motor homes in California to the purchasers (or in some cases, unnamed drivers), who drove them out of state. Taxpayer contended the deliveries satisfied the requirements for exemption from sales tax for interstate shipments.
The court of appeal held in favor of the Board. The court held that Revenue and Taxation Code Section 6396 exempts from sales tax sales in interstate commerce only when the seller or forwarding agent actually delivers the property sold to the purchaser out of state. Sales and Use Tax Regulation 1620, which requires actual out-of-state delivery, was a reasonable interpretation of Section 6396. The burden of proof to establish the exemption is on the seller, and that burden was not met for transactions where the driver was not named. Pope v. State Board of Equalization (1988) 202 Cal.App.3d 73.