Laws, Regulations & Annotations

Business Taxes Law Guide – Revision 2018

Sales and Use Tax Annotations

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Annotation 175.0016

175.0016 Catalog Distributed to California Consumers. An out-of-state based company sells merchandise featured in a catalog directly to the public. The customers are located throughout the United States, including California. The company now wishes to sell its merchandise on a wholesale basis to California retail stores in which it has no interest. In addition, it plans to distribute the company's catalog through one of the California retail stores.

Where the out-of-state company distributes its catalog through a nonaffiliated California store, the company is considered to be "engaged in business in this state" under section 6203(b). The store displaying the catalogs is viewed as a representative of the out-of-state company that is promoting the sale of the out-of-state company's products. Accordingly, the out-of-state company would be responsible for collecting the use tax from California purchasers who purchase directly from the company. 12/8/87.