Laws, Regulations & Annotations
Business Taxes Law Guide – Revision 2017
Sales and Use Tax Annotations
220.0000 "ENGAGED IN BUSINESS"
220.0009 Agent for Non-Registered Out-of-State Sellers. Unregistered out-of-state chemical companies and distributors contracted with a California manufacturer to produce products under each chemical company's own private label. The out-of-state companies made arrangements with carriers to pick up the products from the manufacturer's plant and deliver them to their consumer customers, located in California. The bills of lading indicate that the carrier received the products from the out-of-state retailer at the manufacturer's plant.
Under this scenario, the out-of-state chemical companies are using the manufacturer as an agent/representative and a place of business/distribution, for the purpose of distributing and delivering products to California consumers. Thus, the out-of-state companies that regularly used the manufacturer in this way are engaged in business in California and their sales to consumers are subject to the sales tax. The manufacturer would not be deemed to be the retailer under 6007 for those unregistered out-of-state companies who do this on a regular basis. 10/16/90.