Was the amount paid to a solicitor for a coupon credited toward studio photographs part of the photographer's gross receipts?

Plain-English summary

Solicitors sold coupons in California, and participating photography studios allowed customers to credit the coupon price against their photograph purchases.

Tax counsel concluded that the coupon amount formed part of the studio's gross receipts from selling the photographs under sections 6012 and 6051. The conclusion depended on the coupon price actually being credited toward the studio purchase.

The Board asked the adviser to bring sample coupons and the solicitor contract if the matter required further discussion.

Citations and references

• California Revenue and Taxation Code sections 6012 and 6051 (as cited)
• Requester's Mar. 29 letter concerning California sales tax on coupons sold by in-state solicitors employed by two redacted clients — facts and question supplied; request, attachments, adviser identity, client identities, and locations not reproduced in the official PDF
• Prior Board letter concerning the same subject and its described studio-credit facts — identified and summarized; letter, date, author, addressee, complete facts, analysis, and any attachments not reproduced in the official PDF
• Coupon sales, customer purchases, studio credits, and photograph sales — facts supplied conditionally; coupons, customer and studio identities, coupon prices, photograph prices, receipts, invoices, credit records, returns, and tax computations not reproduced in the official PDF
• Enclosed pamphlet copy of the California Sales and Use Tax Law — identified; pamphlet and enclosure not reproduced in the official PDF
• Official Annotation 295.0160's solicitor-sold coupon, photographer credit, photograph-sale gross-receipts summary, dated Apr. 4, 1950 — annotation omits the Mar. 29 and prior-letter provenance, conditional analysis, statutory citations, pamphlet enclosure, requested coupons and contract, and missing records and supplies no additional transaction record
• Possible later conference, production of coupons or solicitor contract, sale, credit, return filing, audit, assessment, payment, refund claim, appeal, or other agency action — not 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/295-0000-all.html
• Original supporting opinion: https://cdtfa.ca.gov/lawguides/annotations/295-0160.pdf

Original ruling text

295.0160

STATE OF CALIFORNIA

STATE BOARD OF EQUALIZATION
1528 Photograph coupons for which photographer allows credit.

April 4, 1950

Dear Sir:
This is in answer to your letter of March 29 with respect to the application of the California sales tax to sales of coupons by solicitors employed in this state by your clients, --- and --- California ---. For your information we are enclosing a pamphlet copy of the California Sales and Use Tax Law. As indicated by Section 6051 thereof, the sales tax is imposed upon the retailer, measured by the gross receipts of the retailer from the sale of tangible personal property at retail in this state. "Gross Receipts" are defined at Section 6012. As stated in our previous letter concerning this subject, it appears that the purchaser of photographs from your clients' studio is allowed a credit in the amount of the coupons purchased from the solicitor. If this is correct, it would appear that the amount for which the coupon is sold and for which a credit is given by your clients, represents a part of the gross receipts derived from the sale of the photographs, within the meaning of said Section 6012. We shall be pleased to discuss this matter with you at any time that you may be in Sacramento. If possible we suggest that you advise us several days in advance of your call. We also suggest that you bring several of the coupons sold by the solicitors, together with a copy of the contract with the solicitors.

Very truly yours,

R. G. Hamlin
Associate Tax Counsel
RGH: hb
PHOTOGRAPHERS "Coupons"