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 325.0886

(c) Shipments from California to Points Outside State

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

325.0886 Delivery to Purchaser's Representative. The sale of tangible personal property in California to an out-of-state customer, delivered by the sellerto an in-state fabricator designated by the purchaser for further processing, is a taxable sale even though the fabricator may subsequently ship the property out of state pursuant to its contract with the customer. The fabricator is the representative or agent of the customer and delivery to it in California precludes the application of the interstate commerce exemption. If the fabricator had been contracted by the seller rather than the buyer, if payment was due from the seller, and if the seller was liable to the customer for any losses or damages, the subsequent out-of-state shipment by the sub-contractor/fabricator (pursuant to the seller's contract with the customer) would be a sale in interstate commerce. 10/6/92.