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 325.0236

(c) Shipments From California to Points Outside State

(1) Generally

325.0236 Imported Property Installed and Used in a Foreign Trade Zone. Shipping containers equipped with refrigeration units were purchased in Japan by a California corporation. Because of anticipated difference in the voltage systems in various places of use, it was decided to equip each container with a transformer, which the corporation purchased in Belgium. The containers, without transformers, were first used to transport property from Japan to San Francisco. The transformers were shipped to the Foreign Trade Zone in San Francisco and they were delivered under supervision of U.S. Customs to the pier at which the containers were located. They were installed on the containers at that time. The containers were then loaded with cargo and were shipped to a foreign destination.

The transformers ceased to be an import at the time that they were unpacked for attachment to the shipping containers. The attachment is purely a local activity to which use tax applies. Further, section 6009.1 of the Revenue and Taxation Code does not apply because the transformers were used in a revenue producing operation in this state. 12/17/75.