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Business Taxes Law Guide—Revision 2024
Sales and Use Tax Annotations
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G
280.0000 Gifts, Marketing Aids, Premiums and Prizes— Regulation 1670
Annotation 280.0201
280.0201 Casino Gifts. A California taxpayer purchases merchandise from a supplier in Utah. The taxpayer sells the merchandise to casinos in Nevada. The casinos give the merchandise away as promotional items. Some of the merchandise is shipped directly by the Utah supplier to the Nevada casinos. Some merchandise is shipped by the Utah supplier directly to casino patrons, some of whom reside in California. Some merchandise is shipped to the taxpayer in California who subsequently ships it to the Nevada casinos.
Merchandise shipped to Nevada or directly to California casino patrons by the Utah supplier is not subject to tax because the sale does not take place in California and the use occurs in Nevada when the casinos make gifts of the merchandise. Merchandise shipped from Utah to the taxpayer and then shipped by the taxpayer to the casinos in Nevada is not subject to tax because the sales are exempt sales in interstate commerce. If the taxpayer makes deliveries from its California stock to casino patrons in California, tax would apply based on the retail selling price of the merchandise. 8/5/94.