Laws, Regulations & Annotations
Business Taxes Law Guide – Revision 2016
Sales and Use Tax Annotations
(a) IN GENERAL—DEFINITION
495.0285 Fueling Network Sales. Taxpayer A enters into contracts with truckers to sell fuel to them. It issues network authorization cards. Taxpayer A also enters into agreements with Taxpayer B whereby B will dispense fuel to the truckers who hold authorization cards from A. The price arrangement between A and the truckers is unknown to B. A pays B the wholesale market price plus a markup for fuel which B delivers to holders of authorization cards from A. The truckers pay A for the fuel which they receive.
If A has a physical location in California, B is regarded as making a sale for resale to A and must precollect sales tax from A. A is regarded as the retailer and must report and pay sales tax on its sales of fuel. Both parties may claim credit for any prepayment of sales tax previously paid to its suppliers. If A does not have a physical location in California, B is regarded as the retailer. B is liable for tax on the full amount charged to the truckers by A. 12/8/94; 5/29/96.