Laws, Regulations and Annotations


Business Taxes Law Guide—Revision 2024

Sales and Use Tax Annotations

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120.0000 Automatic Data Processing Services and Equipment—Regulation 1502

Annotation 120.1162

(b) Processing Customer-Furnished Information

120.1162 Conversion of Customer-Furnished Information. Company A, an out-of-state service bureau, processes client's computer tapes on its computer/ microfiche processor to convert customer furnished information to microfilm. Company A claims to have no representative nor any operations in California. However, it does hold a Certificate of Registration—Use Tax for California. Tapes and microfilm are received and sent by mail.

The service provided is the conversion of customer-furnished data from one physical form of recordation to another physical form of recordation. Thus, Company A is regarded as selling microfilm and tapes to its customers. (Regulation 1502 (d)(l).) When the retail sales of these items are made to customers for delivery into California, the use tax applies. Since Company A holds a Certificate of Registration—Use tax, it is regarded as a retailer engaged in business in California and required to collect the use tax. 12/12/90.