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BTLG Table of Contents > Sales and Use Tax Annotations > G > 280.0000 Gifts, Marketing Aids, Premiums and Prizes > Annotation 280.0765

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G

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280.0000 Gifts, Marketing Aids, Premiums and Prizes— Regulation 1670

Annotation 280.0765

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280.0765 Interstate Commerce—Marketing Aids. A hardware wholesaler provides marketing aids to its customers under conditions making it the consumer of the marketing aids. The marketing aids are purchased from a manufacturer in Mexico who has an office and a warehouse in California. The warehouse is used for temporary storage prior to delivery to the manufacturer's customers by common carrier.

If the manufacturer fills orders from the wholesaler for shipments to the wholesaler's customers outside California, using goods from the manufacturer's California warehouse, the sale is not subject to either sales tax or use tax. Although the sale is to a consumer (wholesaler) and the sale occurs in California, the requirement that the merchandise be shipped out of state via common carrier, and it is so shipped, exempts the sale from sales tax under Revenue and Taxation Code section 6396. The fact that the property was not purchased for use in California and was not used in California prevents the use tax from applying. 2/16/90.