Did a promotional mail address and occasional agent meeting place count as a California business location?

Plain-English summary

An out-of-state retailer argued that it had no California place of business because its San Francisco quarters did not handle billing or collections. The company described the location as little more than a promotional mail address and an occasional meeting place for West Coast agents.

California concluded that those quarters were an office or premises regularly used by the retailer to transact business under the historical ruling.

The retailer therefore maintained a California place of business and had to collect use tax on nonexempt property bought for California use when sales tax did not apply. It also remained responsible for returns and payment where sales tax applied.

Common questions

Did the office need to handle billing and collections?

No. The letter still treated the quarters as a business office.

Was occasional use by agents enough under the historical facts?

Yes, together with its use as the company's promotional mail address.

Citations and references

• Historical California Sales and Use Tax Rulings 55 and 73
• Board's June 19 letter and taxpayer's response received July 7 — correspondence described; neither letter reproduced in the official PDF
• San Francisco district office report that the taxpayer maintained an office in the city — report not reproduced in the official PDF
• Company's San Francisco quarters, promotional mail address, occasional meetings of West Coast agents, and absence of billing and collections — facts stated; underlying lease, mail, meeting, agent, billing, and collection records not reproduced in the official PDF
• Enclosed copies of Sales and Use Tax Rulings 55 and 73 — enclosures not reproduced in the official PDF
• Required use-tax collection and sales-tax returns and payments after the opinion — no registration, return, remittance, audit, or final outcome supplied in the official PDF

Source

• Annotated Legal Opinions collection: https://cdtfa.ca.gov/taxes-and-fees/annotations-menu.htm
• Annotation page: https://cdtfa.ca.gov/lawguides/vol2/suta/220-0000-all.html
• Original supporting opinion: https://cdtfa.ca.gov/lawguides/annotations/220-0180.pdf

Original ruling text

220.0180

STATE OF CALIFORNIA

STATE BOARD OF EQUALIZATION

August 6, 1952

The M--- Cpmpany
XX-XX --- Avenue
--- --- XX, New York
Attention:

Account No. B-XXXXXX

Mr. G. P. B---

Gentlemen:
In your letter in response to ours of June 19 and received here July 7 you take the position that you are not required to collect the California use tax because you do not maintain a place of business in this State. We enclose a copy of Sales and Use Tax Ruling 73. It has been reported to us by our San Francisco district office that you do have an office in that city although that office does not handle billing and collections. You state in your letter that your California quarters “is little more than a promotional mail address and an occasional meeting place for our west coast agents”. It would appear to us that this constitutes an “office or premises regularly used by a retailer for the transaction of business” within the meaning of Ruling 73. It is therefore, our opinion that you do maintain a place of business in this State and are required to collect the California use tax with respect to any tangible personal property purchased for use in this State not otherwise exempt when the purchase is made under conditions rendering the sales tax inapplicable. These conditions are set forth in Ruling 55, copy enclosed. Where the sales tax is the applicable tax you are, of course, required to make returns and payments of the amount of the tax to the State. Very truly yours,

E. H. Stetson
Tax Counsel

EHS:ja