Which university law-library document-delivery charges were taxable for photocopies, fax-only delivery, rush service, and postage?

Plain-English summary

A university law library planned to retrieve documents for local law firms, charging a standard item fee, per-page photocopy fees, fax fees, postage and handling, and added amounts for rush or off-hours requests.

If the library transmitted material only by fax and supplied no photocopy or other tangible property, the charge was for a nontaxable service. When it provided photocopies, the $7.50 standard fee, $0.25 per-page amount, and rush or off-hours charge were all taxable.

For a combined postage-and-handling charge, only qualifying actual postage could be excluded. The outside-carrier amount had to be separately and clearly stated; if the shipping cost was not clearly shown on the package, the entire $1 charge remained in taxable selling price.

Citations and references

• California Revenue and Taxation Code sections 6006, 6012, and 6051 (as cited)
• California Sales and Use Tax Regulations 1528(a)(1) and 1628(a) (as cited)
• California Sales and Use Tax Annotations 515.0010 and 557.0450 (as cited)
• Requester's Sept. 18, 1989 letter about a proposed university law-library document-delivery service — facts and questions supplied; request, attachments, university and library identity beyond redaction, and proposed service materials not reproduced in the official PDF
• Proposed local-law-firm service, $7.50 item fee, $0.25 photocopy fee, $1 postage-and-handling fee, $0.75 fax fee, rush/off-hours fee, outside-carrier shipment, and package disclosure — facts supplied; price schedule, service terms, customer requests, source documents, copies, fax records, carrier receipts, packages, invoices, returns, and tax computations not reproduced in the official PDF
• Official Annotation 295.0222's service, pricing, photocopy/rush tax, actual-postage exclusion, and fax-only nontaxable-service summary, dated Oct. 30, 1989 — annotation omits the Sept. 18 request provenance, sections 6006/6012/6051, Regulation 1528, Annotations 515.0010/557.0450, detailed transportation-separate-statement test, source wording defects, missing records, and proposed-only status and supplies no additional transaction record
• Possible later launch, customer request, photocopy or fax delivery, rush service, shipment, billing, 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/295-0222.pdf

Original ruling text

295.0222

STATE OF CALIFORNIA

STATE BOARD OF EQUALIZATION
1020 N STREET, SACRAMENTO, CALIFORNIA
(P.O. BOX 942879, SACRAMENTO, CALIFORNIA 94279-0001)
(916) 445-6450

October 30, 1989

Ms. J--- G--R--- S--- L--U--- L--- L--XXX --- ----- ---, CA XXXXX-XXXX Dear Ms. G---: This is in reply to your September 18, 1989 letter regarding the application of sales tax to charges by the U--- L--- L--- for photocopies. You explained that the library is preparing to start a document delivery service, primarily for local law firms. You will charge a standard fee of $7.50 for each item requested and $.25 for each page of the item photocopied. You will charge $1.00 for postage and handling. If you fax the photocopies, you will charge $.75 for each page of each item faxed. If you have rush and off-hours requests, you will have a special additional charge. The sales tax is imposed on retailers for the privilege of selling tangible personal property at retail in California. The tax is measured by the gross receipts of the sale. (Rev. & Tax. Code §6051.) Revenue and Taxation Code section 6012 defines “gross receipts” to mean the total amount of the sale, valued in money, whether received in money or otherwise, without any deduction on account of, inter alia, the cost of the property sold, the cost of the materials used, labor or service cost, interest paid, losses or any other expense. When you transmit the printed material over telephone lines by fax to your customer, and you do not provide any photocopies or other tangible personal property to your customer, tax does not apply to your charge. In such cases, you do not make a “sale” for purposes of the Sales and Use Tax Law. Rather, you perform a nontaxable service. (Rev. & Tax. Code § 6006; BTLG Annot. 515.0010.) When you provide photocopies to your customer, sales tax applies to your charge. Sales and Use Tax Regulation 1528 provides the application of sales tax to charges for photocopies at subdivision (a)(1):

Ms. J--- G---

-2-

October 30, 1989
295.0222

“Tax applies to sales of photostat copies, whether or not produced to the special order of the customer, and to charges for the making of photostats or photostat copies out of materials furnished by the customer or others. No deduction is allowable on account of expenses such as travel time, telephone calls, rental of equipment or salaries or wages paid to assistants or models, whether or not such expenses are itemized in billings to customers.” When you sell photocopies to a customer, tax applies to your standard fee of $7.50, and tax applies to your $.25 per page charge for the photocopies. Tax also applies to your special additional charge for rush and off-hours requests. Tax does not apply to separately stated charges for transportation of property from the retailer'’ place of business or other point from which shipment is made directly to the purchaser, provided the transportation is by other than facilities of the retailer, such as by United States mail, independent carrier, or common carrier. The amount of transportation charges excluded from the measure of tax cannot exceed the cost of the transportation to the retailer. (Rev. & Tax. Code § 6012, subd. (c)(7).) Transportation charges are regarded as “separately stated” only if they are separately set forth in the contract for sale or in a document reflecting that contract, issued contemporaneously with the sale, such as the retailer’s invoice. The fact that the transportation charges can be computed from the information contained on the face of the invoice or other document will not suffice as a separate statement. If a separately stated charge is made designated “postage and handling”, only that portion of the charge which represents actually postage may be excluded from the measure of tax. (Sales and Use Tax Reg. 1628, Transportation Charges, subd. (a).) We consider the designation “postage and handling” coupled with the actual amount of postage placed on the package mailed to a customer to constitute a separate statement of transportation charges excludable from the measure of tax. (BTLG Annot. 557.0450.) Therefore, where you designate a charge as “postage and handling” and the amount of the shipping charges paid to the carrier are clearly set forth on the package received by the customer, the amount of those shipping charges paid to the carrier are excludable from taxation. If the amount of shipping charges is not clearly set forth on the package received by the customer, the measure of tax is your total selling price including the $1.00 postage and handling charge. We hope this answers your questions; however, if you need further information, feel free to write again. Very truly yours,

Ronald L. Dick
Tax Counsel
RLD:sr