Laws, Regulations & Annotations

Business Taxes Law Guide – Revision 2018

Sales and Use Tax Annotations

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Annotation 220.0085

220.0085 Direct Marketer—Nexus with California. An out-of-state direct marketer inquired whether it had created sufficient nexus with California to require that it collect use tax on sales shipped to California consumers through the following actions:

(1) Doing business with a California based "list broker". (There are no other connections with the broker and business is done through the mail and on the telephone.)

(2) The list broker obtains a "computer tape listing prospective" from a list owner.

(3) The list is sent to a California computer service bureau.

(4) The computer service bureau combines this list with others received from the direct marketer, creates mailing labels and ships the mailing labels to Chicago.

(5) The direct marketer, through its agent in Illinois, attaches the labels to its catalogs and mails them throughout the country, including California.

The direct marketer has not created sufficient nexus with California to be considered a "retailer engaged in business in this state". (Revenue and Taxation Code section 6203 (b).) None of the above listed actions include any representative, agent, salesperson, etc., operating in California under the authority of the direct marketer. 4/16/93.