Laws, Regulations & Annotations
Business Taxes Law Guide – Revision 2013
Sales and Use Tax Annotations
557.0000 TRANSPORTATION CHARGES—Regulation 1628
557.0340 Local Dealer for Out-of-State Manufacturer. The retail sales price of equipment sold by a California dealer and delivered from his stock includes the transportation charges from the out-of-state manufacturer to the dealer; but separately stated local delivery charges are exempt from tax if the title to the equipment passes to the customer before delivery or if the delivery is made by facilities other than the dealer's facilities. The above rules are applicable to sales where the dealer orders the equipment from out-of-state, has delivery made to himself, and then ships to the customer. But where the dealer has the equipment shipped directly from the out-of-state manufacturer to the customer, the taxable retail sales price does not include separately stated transportation charges which do not exceed the actual charges of the carrier. The rules which apply to equipment are also applicable to the sales of parts. But no use tax applies to freight charges for customer's parts shipped out of state for repairs where the charges are billed to the customer, because the title to replacement or repair parts passes to the customer when installed in the item being repaired, which is prior to delivery. 9/30/64.