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 325.0490

(c) Shipments from California to Points Outside State

(1) Generally

325.0490 Helicopter Repair. A helicopter company that repairs helicopters, some of which are owned by out-of-state customers, raised the following questions:

In one transaction, the company contracts with a pilot, whereby the pilot agrees to fly a specified route and deliver the aircraft to the owner outside the State of California. The pilot is neither the owner of the aircraft nor an employee of the company and also is not an employee of the aircraft owner. If the contract required delivery out-of-state in this manner, the sale would be an exempt sale in interstate commerce.

In the second type of transaction, the pilot is furnished by the aircraft owner, as permitted by the terms of the contract, and is paid by that owner. The fact that the contract provides that the pilot "shall remain under the direction and control of the company at all times until aircraft leaves California" does not make the delivery a "delivery by the facilities of the seller." Since the pilot is hired by the aircraft owner, the delivery is not by facilities of the company. This sale would not be an exempt sale in interstate commerce. 8/14/92.