Laws, Regulations & Annotations

Business Taxes Law Guide – Revision 2013
 

Sales and Use Tax Annotations


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420.0000 PHOTOGRAPHERS, PHOTOSTAT PRODUCERS, PHOTO FINISHERS AND X-RAY LABORATORIES—Regulation 1528

Annotation 420.0176

(a) IN GENERAL

420.0176 Photography Sales on Board Cruise Ships. A business operates aboard a cruise ship that makes daily trips from San Diego to Ensenada, Mexico. It takes photographs of passengers and develops, prints, displays and sells the photographs from its retail store on the ship. It also sells cameras, film, frames, and batteries from the store. The business also purchases photographic equipment outside California for use on the ship.

Property which is sold to customers, including materials which become a component part of photographs, may be purchased by the business for resale. Sales tax applies to the sale of such property to customers on sales made within the three mile limit. If the sales occur outside the state, the business is required to collect use tax from California customers unless they certify that the property will be used only at a specified point outside the state. Materials used in the process of making photographs and which do not become an ingredient or component part thereof should not be purchased for resale.

Photo equipment purchased outside the state for use aboard the ship is subject to tax if the first functional use is in the state or if the principal use (including storage) is inside the state. 11/10/94.