Laws, Regulations & Annotations
Business Taxes Law Guide – Revision 2017
Sales and Use Tax Annotations
175.0000 COLLECTION OF USE TAX BY RETAILERS—Regulation 1684
175.0145 Purchase of Tubing. Company A, located in California, purchased tubing from Company B, an out-of-state company who was not registered to do business in California. Company B shipped the tubing to Company C, a California subcontractor, for polishing. Company A picked up the tubing from
Company C. No sales or use tax was reported or paid on the purchase. At the time the transaction occurred, Company B had an employee located in California, for the purpose of soliciting sales.
If Company B was not engaged in business in California, at the time of the transaction, Company C who polished the tubing and delivered it to Company A, would be regarded as the retailer and liable for the sales tax. However, since Company B had an employee located in California, for the purpose of making sales, it was a retailer engaged in business in this state as defined in section 6203. Therefore, the tax due is use tax for which Company A is liable. There was insufficient local participation in the sale or delivery by a local office or agent of Company B for the sales tax to apply. 8/11/92.