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 325.0928

(c) Shipments from California to Points Outside State

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

325.0928 Matching of Fit. An out-of-state buyer orders a piece of custom manufactured equipment from a California seller. The seller is instructed to deliver the equipment to a second California manufacturer who is manufacturing a related piece of equipment for the buyer. The second seller checks to assure a precise matching of the two pieces of equipment, and then ships both items to the buyer's out-of-state location. Tax applies to the first sale because there was delivery to an agent of the buyer in this state. Section 6396 restricts the exemption to shipments out of the state by the retailer. 9/13/89.