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Business Taxes Law Guide—Revision 2024

Sales and Use Tax Annotations


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C


175.0000 Collection of Use Tax by Retailers—Regulation 1684

Annotation 175.0117


175.0117 Out-of-State Auctioneer—Collection of Use Tax. An auctioneer's principal place of business is in New York. The auctioneer is considering opening an office in California, staffing it with employees who may:

Contact California residents who may be prospective sellers of art objects, and invite them to include such objects in auction sales.

Contact California residents who may be prospective buyers of art objects at the auctioneer's New York auction sales, and notify them of the time and place such objects will be available for inspection. Information regarding such object may also be provided, upon request.

Make appraisals of art objects for insurance or probate purposes. These objects would not be sold at auction by auctioneer.

Property sold by the auctioneer to a California resident would be delivered by the auctioneer to the resident at the place of auction or to a common carrier selected by the resident. Under these circumstances, some residents might not bring property they had purchased from the auctioneer to California.

If the auctioneer opens an office in California and if its employees solicit or take orders for art objects, it will be a retailer engaged in business in this state and it will be required to collect California use tax on its sales of property purchased for storage, use, or other consumption in California which occur at its auction conducted outside California to the extent the property sold is delivered within California.

On the other hand, the auctioneer will not be required to collect California use tax on its sales of property purchased for storage, use or other consumption in California which occurs at its auction conducted outside California where the property purchased is delivered to residents at the place of auction or to a common carrier selected by residents where the auctioneer is not required by the (auction) contract of sale to provide for delivery in California, or delivery to California residents is at points outside of California. 3/25/70.