Laws, Regulations & Annotations

Business Taxes Law Guide – Revision 2018

Sales and Use Tax Annotations

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Annotation 220.0250

220.0250 Subsidiary. Parent Corporation is the sole shareholder of a subsidiary ("X") which consists of out-of-state department stores and a direct mail order operation ("A-B") with some California customers. The fact that Parent is also a manufacturer and wholesaler of paper products, sold by another subsidiary (Marketing) which does business in California does not mean that "X" is a "retailer engaged in business in this state," as provided in section 6203 in that neither Parent nor Marketing sold, delivered or took orders of tangible personal property on behalf of "X" or its direct mail order operation "A-B" and there are no inter-company transactions or inter-operational or financial involvements or relationships. Accordingly, "X" is not responsible for the collection of California use tax with respect to its catalog sales shipped by mail or common carrier to California purchasers. 10/23/78.