Did owner approval of a lower house-trailer price keep the consignment dealer from being the retailer?

Plain-English summary

A dealer held a house trailer on consignment. The purchaser offered less than the dealer could accept, so the owner joined the discussion and approved the deal. The owner paid the dealer a commission, and the dealer collected sales-tax reimbursement from the purchaser.

The letter did not say that the owner's price approval alone made the owner the retailer. Instead, it asked who had and exercised power to transfer title.

If the dealer could transfer title and did so—either by selling the trailer or by obtaining the legal owner's signed bill of sale and delivering it to the purchaser—the dealer was the retailer and its sale to the purchaser was taxable under the historical rule.

Because the source did not establish the actual title-transfer steps, the conclusion remained conditional.

Common questions

Did the owner's participation in setting the price decide retailer status?

No. The letter focused on who could and did transfer title.

Did collecting tax reimbursement prove the dealer was liable?

The source reported that fact, but stated its test in terms of exercised title-transfer power.

What title act could make the dealer the retailer?

Selling under its own power or obtaining and delivering the owner's signed bill of sale.

Citations and references

• California Sales and Use Tax Ruling 39 (historical, as 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/185-0000-all.html
• Original supporting opinion: https://cdtfa.ca.gov/lawguides/annotations/185-0160.pdf

Original ruling text

185.0160

STATE OF CALIFORNIA

STATE BOARD OF EQUALIZATION

May 2, 1957

--- --- ----- --- ----- --- --Dear Mr. ---:
In your letter of February 18 you requested information regarding application of tax to the sale of a house trailer. You gave the following details:
--- had a house trailer for sale on consignment. You made an offer to buy the trailer, which was less than the dealer could accept. He called in the owner and the deal was closed. The owner paid the dealer a commission and the dealer collected sales tax reimbursement from you. The question is whether sales tax applies to the sale of the trailer. Persons who have the power to transfer title to property and exercise it by selling it or obtaining a signed bill of sale from the legal owner and delivering it to the purchaser, are regarded as retailers and sales tax applies to the sales of such property to them. Thus, if --- had the power to transfer title to the trailer to you and did so in the aforementioned manner, they would be retailers and their sale to you subject to tax. Enclosed is a copy of Ruling 39, for your convenience. Very truly yours,

Bill Holden
Associate Tax Counsel

GAT:rc
Enclosure
Cc:

-- - Compliance