Laws, Regulations & Annotations

Business Taxes Law Guide – Revision 2018

Sales and Use Tax Annotations

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Annotation 220.0245

220.0245 Retailer's Trips to California. An out-of-state company maintains a single business facility which is outside California. California customers mail or fax orders to the out-of-state location. The company ships its goods to the California customer via common carrier; these sales occur outside this state so that California sales tax does not apply. The company's employees travel to California to visit customers and check on product performance at customer plants once or twice a year on a regular basis. The purpose of these visits is to meet customer employees and to better understand customer's technical needs so the company can provide better service.

The company's activities inside this state relate to the sale of tangible personal property. The trips to California provide it with knowledge of anticipated customer needs through evaluation and customer performance. The trips also act to further establish its relationships with California customers and make possible the realization and continuance of valuable contractual relationships resulting in sales. These activities in California are therefore related to the sale of tangible personal property and make the company a retailer engaged in business inside this state within the meaning of section 6203(b). 2/9/96.