Laws, Regulations & Annotations
Business Taxes Law Guide – Revision 2016
Sales and Use Tax Annotations
557.0000 TRANSPORTATION CHARGES—Regulation 1628
557.0508 Sales of Checks by Banks. When there is no explicit agreement between the bank and its customer as to when title to the checks passes to the customers, section 2401(2) of the California Commercial Code would be applicable. This section provides that, unless otherwise explicitly agreed, title passes to the buyer at the time and place at which the seller completes his performance with the physical delivery of the goods. Section 2401(2)(a) provides that, if the contract requires or authorizes the seller to send the goods to the buyer but does not require him to deliver them at destination, title passes to the buyer at the time and place of shipment. Since the bank is only required to send the checks to its customers but is not required to deliver the checks to them, title to the checks passes to the customer at the time and place of shipment pursuant to section 2401(2)(a). Therefore, any separately stated charges made by the bank for transportation are not subject to tax. 12/22/70.