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 325.1040

(c) Shipments from California to Points Outside State

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

325.1040 Storage Prior to Shipment. California manufacturer produced property under a contract which provided that the goods were to be "manufactured in advance, and held for future withdrawals". Upon completion of manufacture the goods were paid for in full, including the amount for sales tax. Upon subsequently receiving shipping orders, the manufacturer shipped some of the goods to out-of-state points. The sales tax does not apply to sales wherein the goods were eventually shipped to out-of-state points. The manufacturer was obligated under the contract to ship the goods and such obligation was not completed until shipment was made. 5/28/53.