Laws, Regulations & Annotations
Business Taxes Law Guide – Revision 2014
Sales and Use Tax Annotations
325.0000 INTERSTATE AND FOREIGN COMMERCE—Regulation 1620
(c) SHIPMENTS FROM CALIFORNIA TO POINTS OUTSIDE STATE
325.0572 Sale of Satellite. A satellite builder agrees to build and launch a satellite and check out the functional capability on each satellite prior to passing title to the satellite. The builder subcontracts the launching to a firm who agrees to pay for the satellite if it does not achieve the prescribed orbit.
Assuming that the launching firm would take title to any satellite that fails to achieve the proper orbit, the sale by the builder is an exempt sale since it does not occur in California, regardless of the satellite's location in orbit at the time title passes. Title passes while the satellite is in orbit to either the original customer or the launching firm. 11/7/91.