Laws, Regulations & Annotations

Business Taxes Law Guide – Revision 2018

Sales and Use Tax Annotations

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Annotation 220.0002

220.0002 Accepting Returned Products on Behalf of Out-of-State Retailer. Company B is an out-of-state retailer located solely outside California. It sells products through its website with all orders processed out of state. The products are shipped directly to the customers from the retailer's out-of-state warehouse. Customers may return unwanted merchandise previously ordered from the out-of-state retailer to Company A's in-state stores. Company A then returns the products to Company B's out-of-state warehouse. Company B will issue a credit or refund to the customer and will compensate Company A for its services on its behalf.

Company A is acting as Company B's representative in this state for acceptance of returns of items sold. The ability of Company B's customers to return unwanted items to local stores of Company A on Company B's behalf as an alternative to packing them up and shipping them back to Company B is sufficient to bring Company B within the definition of retailer engaged in business in this state. 6/22/99. (2000–1).