Laws, Regulations & Annotations

Business Taxes Law Guide – Revision 2018

Sales and Use Tax Annotations

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432.0000 PRINTED SALES MESSAGES—Regulation 1541.5

Annotation 432.0064

432.0064 Luggage Tags. A California advertising specialties distributor works with a California advertising agency who has a Utah client who has no contract or "nexus" with California except its contract with the distributor and the agency. The agency ordered luggage tags from the distributor as an agent of its Utah client, who was the purchaser from the distributor. No resale certificate was provided. A portion of the tags were purchased from a California supplier and the remainder of the tags were purchased from out-of-state suppliers. All the tags were shipped to a California mailing house except for a small portion shipped by the California supplier to Utah. The luggage tags were shipped as gifts by the mailing house throughout the United States with less than 5% shipped to California addresses. First, the luggage tags do not qualify for the printed sales message exemption. The definition of printed sales message is a narrow one, and does not include luggage tags.

The sale of the tags that were shipped by the California supplier directly to Utah pursuant to the contract of sale was an exempt sale of interstate commerce. The sale of the remaining tags that were shipped to the California mailing house are subject to tax since the tags were not shipped out of state by the suppliers pursuant to the contract of sale. Instead, these tags were shipped to the Utah purchaser's agent, the California mailing house, for use by the Utah purchaser in California. 8/9/93.