Laws, Regulations & Annotations

Business Taxes Law Guide – Revision 2014
 

Sales and Use Tax Annotations


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G

280.0000 GIFTS, MARKETING AIDS, PREMIUMS AND PRIZES— Regulation 1670

Annotation 280.0205

280.0205 Catalogs. A California taxpayer purchases catalogs from an out-of-state printer (vendor) and has the catalogs sent directly to its California facilities where they are stored for future shipment nationwide. The catalogs were brought into this state approximately 90 days after purchase and were subsequently shipped free of charge from California to potential customers nationwide.

The taxpayer made a gift of the catalogs in California when it withdrew the catalogs from its California warehouse and shipped them to prospective customers by common carrier or U.S. Mail. Thus, use tax applies. If the taxpayer had first shipped the catalogs to its out-of-state warehouse, and then shipped them to prospective customers, section 6009.1 would exclude the purchase from tax since petitioner's sole use in California would have been to store them for subsequent use solely outside the state.

Even though the catalogs may have entered this state 90 days after the date of purchase, the taxpayer first functionally used the catalogs in California when they were given to prospective customers. There was no functional use outside the state. The taxpayer made only two uses, storage and gifting, and both occurred in California.

Accordingly, the use of the catalogs by the taxpayer is subject to use tax measured by the sales price of the catalogs to the taxpayer. 1/4/94.