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 325.0342

(c) Shipments from California to Points Outside State

(1) Generally

325.0342 Space Flight Properties. The sale of a satellite while it is in orbit to the entity for whom it was built is not subject to sales tax since the sale does not occur in California. The purchase of the component parts of the satellite are not subject to use tax since the removal of the satellite from the state by the launch vehicle is not a use of the satellite. The purchase of the component parts of the launch vehicle is subject to either sales or use tax as the functional use of the vehicle begins at the time it is placed on the launch pad or the time the satellite is connected to it. Even if the functional use was deemed to commence at the time of blast-off, the nature of the use in California is sufficient to offset the short period of use in this state. 4/9/93.