Laws, Regulations & Annotations
Business Taxes Law Guide – Revision 2013
Sales and Use Tax Annotations
515.0000 SERVICE ENTERPRISES GENERALLY—Regulation 1501
(a) IN GENERAL—SERVICE DISTINGUISHED FROM SALE
515.0012.400 On Line Advertising. A firm carries advertisements on line for goods in much the same manner as classified ads in newspapers. Both buyers and sellers register with the firm. Fees are charged sellers for the advertisements. The seller sets a minimum sales price and the item is open for bid for varying periods. Prospective buyers place bids. The firm does not have authority to accept or reject bids. If the item sells, the firm receives a percentage of the sales price. It does not provide any warranties, an escrow or otherwise become involved in the transaction. The firm does not acquire possession to the property nor does it have power to pass title. The buyer and seller handle all arrangements. The firm does not deliver any tangible personal property such as diskettes, manuals or other property to potential buyer and seller.
The firm is conducting a service, and it is not a retailer. It also has no obligation to pay or collect California sales or use tax which may be imposed on the transaction between the buyer and seller. 4/8/97.