Laws, Regulations & Annotations
Business Taxes Law Guide – Revision 2014
Sales and Use Tax Annotations
280.0000 GIFTS, MARKETING AIDS, PREMIUMS AND PRIZES— Regulation 1670
280.0960 Samples. A wholesale distributor purchases along with his regular items, samples of these same products. Some of the samples are used in California, but many are sent to out-of-state offices for the purpose of being given away or used in demonstrating the products.
The wholesaler is the consumer of the samples and the sale to him is a taxable retail sale. If the sale of samples is made in California, the fact that the purchaser will use the property out-of-state does not exempt the transaction unless the seller is required to ship the goods to such out-of-state points.
If sample goods are obtained by merely withdrawing a sufficient quantity from regular inventory, such goods may be purchased ex-tax. Upon such withdrawal of samples and use thereof in California the use tax, measured by the cost of such samples will apply.
If sample goods are specifically purchased for such purpose, the giving of a resale certificate is not proper as the sales tax applies to such purchase. 12/22/53.