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 325.0882

(c) Shipments from California to Points Outside State

(4) Delayed Shipment; Use Prior to Shipment; "Bailee Clauses"

325.0882 Delayed Out-of-State Shipment. An auctioneer sold a horse in California to a purchaser who had his agent haul the horse in her van to a ranch in Arcadia, California. The horse was shipped to Kentucky one month after purchase. The purchaser's agent was not an interstate hauler nor freight forwarder. The purchaser was shown as both shipper and consignee on the shipment to Kentucky. He stated that the delay was caused because he could not obtain rail space for the horse any sooner. Under these conditions, the exemption for sales in interstate commerce is inapplicable since the seller delivered the horse to the buyer in California.

The auctioneer also sold 16 horses over a period of three days to a rancher from Laredo, Texas, and delivered them to a ranch in Lancaster, California, via a van line company. The auctioneer was shown as the shipper. After about a month in Lancaster, pending the availability of vans going to Texas, the horses were picked up by the van line for shipment to Texas. The Lancaster ranch was shown as shipper. If the ranch held the horses on behalf of the van lines (because they had to be grazed and watered while waiting for transport to Texas), the sale is exempt as a sale in interstate commerce notwithstanding the delay in shipment. If the ranch held the horses on behalf of the out-of-state purchaser, the exemption is not applicable because delivery was made to the purchaser's agent in California. 2/24/69.