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Business Taxes Law Guide—Revision 2024

Sales and Use Tax Annotations


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B


135.0000 Banks And Insurance Companies—Regulation 1567

Annotation 135.0065


135.0065 Checks Sold by a Federal Credit Union. A military federal credit union, with a main office in this state, operates branches throughout the Far East. The branches use an APO San Francisco, 96343 as an address. Any organization/individual using this address is not physically located in California.

It is assumed that the federal credit union is the retailer of the checks. As a matter of state law, the incidence of sales tax is on the retailer. Since a federal credit union is exempt from sales tax, the retail sales of checks in California by the federal credit union are also exempt from sales tax. Since the federal credit union's sales are exempt from sales tax, use tax applies when the checks are purchased for use in California, and when the use tax applies, the federal credit union is required to collect that use tax from its customers and remit the tax collected to the state. It is presumed that mail addressed to an APO is forwarded outside California. This means that checks mailed to a customer through an APO address are presumed to be purchased for use outside California and not subject to use tax. Records showing names and addresses as they appear on the mailed matter must be kept as evidence of the mailing. 12/18/86; 3/2/88.