Laws, Regulations & Annotations

Business Taxes Law Guide – Revision 2014
 

Transactions and Use Tax Annotations

800.0000 APPLICATION OF TRANSACTIONS (SALES) TAX AND USE TAX—Regulation 1823

Annotation 800.0030

800.0030 Offer to Purchase. A taxpayer requested an opinion as to the sales tax rate applicable to purchases made in San Joaquin County. The problem arose with regard to contracts in which the order was placed prior to, and the goods were shipped after, the date a county-wide transactions and use tax was imposed. Does this contract come within the fixed-price contract exemption?

A contract is not binding until the seller accepts the buyer's offer to purchase. An offer to purchase may be accepted by any reasonable means. The normal method of accepting a purchase order offer is to ship the goods. In such contracts, the agreement is not binding until the date of shipment. The buyers acquires title to the goods when delivery is complete. If the order requires some specific mode of acceptance, then the contract would become binding on the date the seller negotiated the payment or issued the written acceptance. If this contract is not binding prior to the date this tax is revised, it is subject to the higher rate. 6/11/91.