Laws, Regulations & Annotations

Business Taxes Law Guide – Revision 2018

Sales and Use Tax Annotations

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Annotation 570.0035


570.0035 Catalogues Distributed Door to Door. A taxpayer operates a chain of stores in California and also maintains its business office in California. Catalogues for its stores are printed by an out-of-state printer and the catalogues are distributed door to door to California donee-recipients by independent delivery companies hired by taxpayer. The taxpayer allows the delivery companies to arrange with the printer for deliveries via contract or common carriers to warehouses, designated by the delivery companies, from which door to door deliveries are made. The catalogues owned by the taxpayer are shipped bulk and are not pre-addressed to the California donee-recipients. The independent delivery companies are agents of taxpayer. Title to these catalogues is still vested in taxpayer while they are located at the various California warehouses.

Section 6009 provides that "use" includes the exercise of any right or power over tangible personal property incident to ownership of the property. Thus, the transfer of title to the catalogues in California by taxpayer to the donee-recipients constitute such a "use."

In addition, the imposition of the tax upon this use of the catalogues after it has been brought into the state does not violate the Commerce Clause of the United States Constitution. Title to the catalogues was vested in taxpayer while they were located at the warehouses, at which point the interstate commerce portion of the transactions ended. Following the interstate shipment the taxpayer, through its agents, then performs the local intrastate act of transferring title to the donees. 9/10/85.

(Note: Subsequent statutory change re printed sales message.)