Laws, Regulations & Annotations

Business Taxes Law Guide – Revision 2018

Sales and Use Tax Annotations

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240.0000 FLORISTS—Regulation 1571

Annotation 240.0033

240.0033 Florist Delivery Service—Tele-Florist. A firm headquartered in California intends to direct its customers to place orders for flowers to its designated "800" number. The firm will bill its customers at the time the order is taken and will place the order with an unidentified vendor who will deliver the flowers to the intended recipient. The vendor will prepare and deliver the floral arrangement and bill the firm at wholesale cost. The firm will not maintain any inventory of plants or flowers, and asserts that it is not a florist.

The California courts have consistently held that persons making sales of tangible personal property which are delivered by the manufacturer or creator of the property will nonetheless be considered retailers if they hold themselves out as the suppliers of the merchandise purchased. (See Meyer v. State Board of Equalization (1954) 42 Cal.2d 376 and Bank of America v. State Board of Equalization (1962) 209 Cal.App.2d 780.) The Meyer court, in finding that the party that solicited the order was a California retailer, based its decision on its conclusion that these transactions constituted sales for resale from the supplier to the solicitor followed by a subsequent retail sale by the solicitor to the purchaser. Here, the firm's transactions come within the facts of the Meyer case. Therefore, the firm is a retailer (a florist) who purchases, for resale, the flowers from the delivering florist. This conclusion is further supported by the fact that the firm will be billed, by the delivering florist, "on a wholesale basis."

Accordingly, all orders received by the firm, which is headquartered in California, are subject to sales tax regardless of whether the flowers are delivered inside or outside of California. On the other hand, if the firm was located in Oregon, California sales tax would not apply to any of the orders taken at the Oregon location regardless of the place of delivery or the residency of the person placing the order. (Regulation 1571.) 12/23/96.