Laws, Regulations & Annotations
Business Taxes Law Guide – Revision 2014
Sales and Use Tax Annotations
557.0000 TRANSPORTATION CHARGES—Regulation 1628
557.0573 Stacking and Spreading Charges. Retailers of firewood, hay, wallboard and roofing materials often also provide stacking and/or spreading services upon delivery of the materials to the purchaser. The following examples assume that the tangible personal property sold is subject to tax. Also assumed is that the retailer's delivery charges, including unloading charges, are taxable either because the retailer uses its own trucks and there is not a title clause passing title at the place of shipment, or because the retailer uses a common carrier and the delivery terms are F.O.B. place of delivery.
1. The retailer sells the material to the purchaser and requires the purchaser to pay for delivery and stacking of the material by the retailer. Revenue and Taxation Code section 6012(b)(1) includes any services that are a part of the sale in the measure of sales tax. The stacking charge is a mandatory part of the sale of the material by the retailer and therefore the stacking charge is subject to sales tax.
2. The retailer sells the material but the delivery is optional. However, if the purchaser elects to have the retailer deliver the material then the retailer requires the purchaser to pay for the stacking as well. In this example, the stacking charges are also subject to tax. If the retailer separately states the charge for the stacking, then the stacking charge is a service part of the sale. If a separate statement for the stacking charge is not made, then the charge for the stacking is considered as part of the taxable transportation charge.
3. The retailer sells and delivers the material to the purchaser without requiring the purchaser to pay for the stacking. In cases where the purchaser elects to have the retailer provide the stacking, the retailer does not separately state the charge for the stacking on the invoice. Since a separate statement for the stacking charge is not made, the stacking charge is considered to be part of the taxable transportation charges.
4. The retailer sells and delivers the material to the purchaser. For an additional charge the retailer will also spread the material, e.g., roofing tiles. The charge for the spreading is optional and is separately stated on the invoice. Since this is an optional service and is separately stated, it is not a service part of the sale and is not subject to tax. This is true whether or not the retailer's transportation charges are subject to tax and regardless of whether or not the materials come to rest prior to the spreading. 8/1/03. (2004–2).