Laws, Regulations and Annotations


Business Taxes Law Guide—Revision 2024

Sales and Use Tax Annotations

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325.0000 Interstate and Foreign Commerce—Regulation 1620

Annotation 325.0001

(a) In General—Shipments Into California from Points Outside State

325.0001 Advertising Circulars—Title Passing Out of State. A California firm orders advertising circulars to be printed by an out-of-state printer. The purchase order provides that the title will pass to the firm at the location of the out-of-state printer at the time the printing order is completed.

The order is communicated by United States mail or by telephone to the out-of-state printer. Follow up on the printing order is done by telephone, mail, and through the printer's agents or representatives in California. The contact in California is for the purpose of obtaining the advertising copy that will be used by the out-of-state printer in printing the circulars. Such copy might consist of paste-ups, type-setting, or other prepared work done in California by the agent of the out-of-state printer.

The California firm does not take delivery of all the circulars. The out-of-state printer will mail circulars to potential California customers, deliver to common carriers for delivery to stores as store copies, or deliver to common carriers for delivery to publishers located in California for insertion in publications.

Based on the fact that title to the printed circulars passes to the purchaser outside California, the transaction is not subject to sales tax because the sale took place outside California. Therefore, circulars shipped to the customer's California stores for use as store copies are subject to use tax. The circulars shipped to publications and inserted into newspapers or periodicals which are exempt under section 6362 are exempt from the use tax. Circulars mailed by the out-of-state printer to addresses in California are not subject to use tax because the mailing from the out-of-state printer is regarded as an out-of-state use. 6/15/82.

(Note.—Subsequent statutory change re printed sales messages, section 6379.5.)