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BTLG Table of Contents > Uniform Local Sales and Use Tax Annotations > 710.0000 Place of Sale for Purposes of Bradley-Burns Uniform Local Sales and Use Taxes > Annotation 710.0002

Uniform Local Sales and Use Tax Annotations

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710.0000 Place of Sale for Purposes of Bradley-Burns Uniform Local Sales and Use Taxes—Regulation 1802

Annotation 710.0002

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710.0002 Place of Sale—Agents. A taxpayer sells its products through distributors who are not the taxpayer's employees. These distributors may or may not handle other product lines. The taxpayer is not a 6015 retailer. The distributors call on existing and prospective customers, take orders for the products, and forward the orders to the taxpayer's manufacturing facility located in California. Customers may send a few orders directly to the factory, but the distributors still get commissions on these sales. The distributor may negotiate prices with the customer. Both the distributors and the taxpayer advertise the products. The taxpayer handles all billing and collections. The distributors are true agents and are not buying and selling on their own account.

Under Regulation 1699(e), a permit is not required for each agent who makes sales on behalf of a principal if the principal obtains a permit for each of its places of business in California. Therefore, in this case, the local tax should be allocated to place of business of the taxpayer (principal) since it has a permit for the California location.

In situations where agents are involved, Regulation 1699(e) is controlling rather than Regulation 1802(a)(2) which states that an employees activities will be attributed to the place of business out of which he or she works. Regulation 1802(a)(2) specifically refers to "employees." When compared to Regulation 1699(e), it is clear that allocation of local tax revenues on sales by independent agents must be treated differently. 10/17/95.