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 325.0607

(c) Shipments from California to Points Outside State

(1) Generally

325.0607 Qualifying as a "Carrier." Company A, an owner and operator of offshore oil drilling platforms located in waters outside California state boundaries, purchases goods for the platforms from California vendors who deliver the goods to a port in California. The goods are accepted by B, an independent contractor, under an agreement with A to perform the service of consolidating and loading the goods onto a ship. The ship is chartered by A from C, the owner of the ship, under a "bareboat" charter agreement. At the same time, A enters into an "operating agreement" with D, an "operator" who agrees to man, operate, victual, navigate and supply the vessel.

D, the operator, qualifies as a "carrier" under section 6396 and the requirements of that section are met when the goods are delivered by D to A's offshore facilities. The operating agreement is in essence a subcharter agreement under which A bareboats the vessel to D, who in turn agrees to carry goods for A. 10/14/75.