Laws, Regulations and Annotations
Search
Business Taxes Law Guide—Revision 2024
Sales and Use Tax Annotations
A B C D E F G H I J L M N O P R S T U V W X
I
325.0000 Interstate and Foreign Commerce—Regulation 1620
Annotation 325.0259
(c) Shipments From California to Points Outside State
(1) Generally
325.0259 Auction Sales of Horses Ultimately Shipped Outside this State. An auctioneer sends notices to prospective out-of-state purchasers regarding sales tax regulations together with a notice of intention to bid form to be completed by prospective purchasers of animals to be shipped in interstate commerce. The notice requires the bidder to " … . register his intention to bid prior to sale by completing the notice of intent to bid form. If it is desired that any horse purchased be shipped in interstate commerce such instructions must be given in writing before the sale starts. Only in this way may the transportation be made pursuant to the contract of sale." There appears to be little question that there is at least an attempt to handle the sales in such a way that they would be nontaxable as interstate sales.
It has been concluded that if the prospective out-of-state purchaser complied with the conditions of the "notice," the purchaser's submission of the written notice of intention to bid to the auctioneer/seller (fully filled out and prior to the auction/sale) is regarded as a "pre-existing agreement" between the auctioneer and the bidder which required the auctioneer to deliver the horse to a point outside the state. Since the pre-existing agreement was intended to be a term or condition of the entire contract of sale, it would appear that the auctioneer/seller was contractually obligated to provide for delivery of the horse to a point outside this state pursuant to the contract of sale. Since the customer has made a reasonable attempt to comply with the conditions of ruling 55(A)(1)(c), (Regulation 1620), these sales should be considered exempt from sales tax. 5/20/66.