Did California sales or use tax apply when a retailer mailed goods to an armed-forces APO or FPO address through a California postmaster?

Plain-English summary

California staff said sales tax did not apply when a retailer mailed goods, under the sales contract, to armed-forces personnel at points outside the United States even though the package was addressed through a California postmaster.

Mail addressed to an Army Post Office or Fleet Post Office in care of the postmaster was presumed to be forwarded outside California. The retailer had to keep records showing the names and addresses printed on the mailed matter and should retain evidence that it performed the mailing.

For the same reason, an out-of-state mail-order retailer did not need to collect California use tax on qualifying APO or FPO shipments: the purchaser did not use the property in California. Staff said collecting California use tax on those sales was improper.

Common questions

Did routing through a California postmaster make the sale taxable?

No, when the goods were forwarded outside California under the cited rule.

What records did the retailer need?

The names and APO/FPO addresses shown on the mail and evidence that the retailer mailed the goods.

Did the same result apply to out-of-state mail-order retailers?

Yes, for qualifying shipments.

Citations and references

• California Code of Regulations, title 18, section 1620(a)(3)(E)1 — APO/FPO sales-tax rule and recordkeeping quoted
• California Revenue and Taxation Code section 6009.1 — absence of California use cited

Source

• Annotated Legal Opinions collection: https://cdtfa.ca.gov/taxes-and-fees/annotations-menu.htm
• Annotation page: https://cdtfa.ca.gov/lawguides/vol2/suta/175-0000-all.html
• Original supporting opinion: https://cdtfa.ca.gov/lawguides/annotations/175-0010.pdf

Original ruling text

175.0010

STATE OF CALIFORNIA

STATE BOARD OF EQUALIZATION
PO BOX 942879, SACRAMENTO, CALIFORNIA 94279-0001
TELEPHONE (916) 445-3723

February 27, 1990

REDACTED TEXT

Dear Mr. REDACTED TEXT:
This is in response to your letter of January 24, 1990. You suggest that a large group of people who receive mail or shipments from, or through, California is unfairly charged for California sales taxes. You point out that this group, the members of which have APO/FPO addresses, may live very far from the State of California. State Board of Equalization Regulation 1620, Interstate and Foreign Commerce, resolves this problem as to sales tax, in paragraph (a)(3)(E)1. That paragraph provides: “Tax does not apply to sales of property which is mailed by the retailer, pursuant to the contract of sale, to persons in the armed forces at points outside the United States, notwithstanding the property is addressed in care of the postmaster at a point in this state and forwarded by him to the addressee. “When mail is addressed to Army Post Offices (A.P.O.’s) or to Fleet Post Offices (F.P.O.’s) in care of the postmaster, it will be presumed that it is forwarded outside California. The retailer must keep records showing the names and addresses as they appear on the mailed matter and should keep evidence that the mailing was done by him.” Thus California sales tax does not apply to sales made by California retailers who ship goods to APO and FPO addresses. Likewise, mail order retailers located outside this state are not required to collect California use tax with respect to goods shipped into California to APO or FPO addresses. There is no use by the purchaser of the property in question in this state. (Revenue and Taxation Code Section 6009.1).

Mr. REDACTED TEXT

-2-

February 27, 1990
175.0010

We believe that California retailers are generally aware of the provisions of the California regulation. By copy of this letter to our district office having jurisdiction over out-of-state mail order retailers, we are requesting that such retailers be advised that they are not required to collect use tax on APO/FPO sales, and that it is improper to do so. Very truly yours,

Gary J. Jugum
Assistant Chief Counsel
GJJ:sr
cc:

Ms. Judy A. Agan
Deputy Director, Business Taxes
Mr. Jim Caldwell
Administrator, Out-of-State District