Laws, Regulations & Annotations

Business Taxes Law Guide – Revision 2013
 

Sales and Use Tax Annotations


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C

175.0000 COLLECTION OF USE TAX BY RETAILERS—Regulation 1684

Annotation 175.0145

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.