Did a yacht broker's sales-tax liability turn on whether the owner gave an open or exclusive listing?

Plain-English summary

A yacht company asked whether a broker's sales-tax liability changed when the vessel owner used an exclusive listing instead of an open listing.

The letter said the label did not control. The relevant questions were whether the broker had the right to beneficial use of the boat or power, by the broker's own act, to vest ownership in another person.

The source cited an Attorney General opinion and a later explanatory letter but did not describe a particular sale or decide that the broker actually possessed either power.

A note added to the official source on December 8, 1997 directed readers to subdivisions (b) and (c) of section 6202. That later note did not change the original March 18, 1953 letter date.

Common questions

Did an exclusive listing automatically make the broker the retailer?

No. The source expressly said open versus exclusive listing did not determine liability.

What did determine liability under the letter's test?

Beneficial use of the yacht or unilateral power to vest ownership in the buyer.

Did the letter decide a specific yacht sale?

No. It stated the governing test in response to a general listing question.

Citations and references

• California Revenue and Taxation Code section 6202(b) and (c) (later 1997 source note)
• California Attorney General yacht-broker opinion and follow-up letter (as cited; numbers omitted)

Source

• Annotated Legal Opinions collection: https://cdtfa.ca.gov/taxes-and-fees/annotations-menu.htm
• Annotation page: https://cdtfa.ca.gov/lawguides/vol2/suta/185-0000-all.html
• Original supporting opinion: https://cdtfa.ca.gov/lawguides/annotations/185-0120.pdf

Original ruling text

185.0120

STATE OF CALIFORNIA

STATE BOARD OF EQUALIZATION

March 18, 1953

G--- M--- Company
XXXX --- Boulevard
--- ---, California
Attention:

-- XXXXXX

Mr. R--- J. R---, Jr.
Business Manager

Gentlemen:
This is in answer to your letter of March 11 concerning the liability of a yacht broker for sales tax in connection with the sale of yacht owned by another who gives the broker either an exclusive or an open listing. The liability of the yacht broker does not depend upon whether he holds an exclusive or an open listing. It depends rather upon whether he has the right to beneficial use of the boat or the power by his own act to vest ownership in another. The matter has been the subject of an opinion of the Attorney General and a recent letter from his office concerning the scope of the opinion. Copies of the opinion and letter are enclosed. Very truly yours,

E. H. Stetson
Tax Counsel

EHS:ph
cc:

Los Angeles – Tax Administrator

cc:

Mr. K--- E. M--Y--- and S--- B--- Commissioner
XXX --- Building
--- ---, California

See now, in addition, subdivisions
(b) & (c) of §6202.
DHL 12/8/97