Laws, Regulations & Annotations
Business Taxes Law Guide – Revision 2013
Sales and Use Tax Annotations
505.0000 SALES TO THE UNITED STATES AND ITS INSTRUMEN-TALITIES—Regulation 1614
(a) IN GENERAL—AGENCIES QUALIFYING FOR SALES TAX EXEMPTION
505.0072 Checks Sold by a Federal Credit Union. A military federal credit union, with a main office in this state, operates branches throughout the Far East. The branches use an APO San Francisco, as an address. Any organization/individual using this address is not physically located in California.
It is assumed that the federal credit union is the retailer of the checks. As a matter of state law, the incidence of sales tax is on the retailer. Since a federal credit union is exempt from sales tax, the retail sales of checks in California by the federal credit union are also exempt from sales tax. Since the federal credit union's sales are exempt from sales tax, use tax applies when the checks are purchased for use in California. When the use tax applies, the federal credit union is required to collect that use tax from its customers and remit the tax to the state. It is presumed that mail addressed to the APO is forwarded outside California. This means that checks mailed to a customer through the APO address are presumed to be purchased for use outside California and not subject to use tax. Records showing names and addresses as they appear on the mailed matter must be kept as evidence of the mailing. 12/18/86; 3/2/88.