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Business Taxes Law Guide—Revision 2024
Sales and Use Tax Annotations
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557.0000 Transportation Charges—Regulation 1628
Annotation 557.0052
557.0052 Conflicting F.O.B. Delivery Terms. When a seller's bid quotation to its customer includes an F.O.B. factory delivery term (with no title clause and delivery is by common carrier) but its customer's purchase order includes an F.O.B. jobsite delivery term, the two delivery terms are in conflict with each other and neither term would be considered to be part of the contract as each party is considered to have objected to the delivery term of the other party under Commercial Code section 2207. The net effect of conflicting F.O.B. terms is that the contract becomes a "shipment contract" rather than a "destination contract" by operation of section 2401(2) and 2504(a) of the California Commercial Code and title passes on the retailer's delivery of the property to the carrier prior to commencement of transportation. Thus, the seller's transportation charges are excluded from the measure of tax. 9/20/85.