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 325.0053

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

325.0053 Installation by an Agent of the Retailer. A computer manufacturer, having no place of business in California, has an agent located in California who solicits equipment orders from California customers and forwards the orders to the manufacturer for acceptance. When the order is accepted, the equipment is shipped and billed directly to the customer by the manufacturer, although in some isolated instances, the shipment is to the agent for redelivery to the customer. While shipments are made by common carrier, F.O.B. out of state, the agreements require the manufacturer to install the equipment at the customer's location and the manufacturer completes its installation obligation by contracting with third parties to install the equipment.

The manufacturer is obligated to collect use tax on its sales to California customers since it is engaged in business in this state pursuant to section 6203. The manufacturer is not liable for sales tax on its retail sales in California. This is because the manufacturer itself (as distinct from its agent) has no place of business in California. Regulation 1620 provides in summary that the sales tax applies only if there is both a sale which occurs in California and some involvement in the sale by a place of business of the retailer. The latter condition is not met when the manufacturer's installation agent, rather than the manufacturer itself, completes the delivery of the equipment in California by installing the equipment at the buyer's location. 5/21/85.