Laws, Regulations & Annotations
Business Taxes Law Guide – Revision 2013
Sales and Use Tax Annotations
325.0000 INTERSTATE AND FOREIGN COMMERCE—Regulation 1620
(c) SHIPMENTS FROM CALIFORNIA TO POINTS OUTSIDE STATE
325.1266 Foreign Seller and Purchaser of Tanker. A foreign corporation is not engaged in business in California nor anywhere else in the United States. The corporation sells an oil tanker to another foreign corporation also not doing business in California. At the time of the sale, the tanker is situated in a California harbor. The sale of the tanker is not subject to sales nor use tax if, immediately upon the change of the ship's registry, the ship sails for a foreign destination without returning to the United States. A sale under these circumstances is an exempt export sale.
If there is a delay in sailing due to the need for minimal repairs necessary for the tanker to sail, the sale would be subject to sales tax because the repairs would be an interruption of the export journey for a purpose independent of the transportation of the goods. 3/16/76.