Was California delivery of a truck for fire-equipment installation taxable when an out-of-state retailer sold the vehicle to a New Mexico village?

Plain-English summary

The Village of Lake Arthur, New Mexico, purchased a fire truck through an out-of-state retailer. A manufacturer's California division supplied the truck and delivered it to a Los Angeles firm for installation of firefighting equipment.

Assistant counsel said taxability depended on whose agent the installer was and what the retailer had agreed to sell. If the village separately hired the installer and bought only a truck delivered to that installer, section 6007 treated the California manufacturer's division as delivering to the consumer or its agent, producing a taxable California retail sale.

If the retailer instead contracted to sell a completely equipped fire truck, hired the installer, and arranged for the truck to be driven to New Mexico, the installer would act for the retailer. In that scenario, the manufacturer's division would be delivering to a retailer in an exempt sale for resale rather than to the consumer. The letter requested more facts about the driver, employment, installation contract, payment, and inspection before resolving any transaction that did not clearly fit either alternative.

Section 6007 as quoted made a California owner, former owner, or factor the deemed retailer when it delivered property here to the consumer or consumer's agent under an outside retailer's retail sale. The stated measure was the full retail selling price, but the source supplies neither price nor tax calculation.

The request, orders, contracts, payment, title, delivery, installation, driver, transport, inspection, agency, and exemption records are absent. No supplemental response or final outcome establishes which alternative actually applied. The live annotation accurately states the two possibilities but omits that unresolved posture and the requested evidence.

Common questions

Why could the California motor division owe tax on the outside retailer's sale?

Section 6007 as quoted deemed an owner or former owner making California delivery to a consumer under a retail sale by a retailer not engaged here to have made the California retail sale, measured by the retail selling price.

When was delivery to the Los Angeles installer taxable?

If the village separately contracted with the installer and bought only a truck delivered there, the installer acted for the consumer. The motor division's California delivery then fell within counsel's taxable alternative.

When could the motor division's delivery be for resale?

If the outside retailer promised a completely equipped truck, contracted with and paid the installer, and arranged transport of the finished truck to New Mexico, counsel would treat the installer as the retailer's agent and the motor division's delivery as an exempt sale for resale.

Which facts did counsel still need?

The response asked who drove the completed unit to New Mexico, who employed that driver, what the installation contract required, who paid the installer, and who inspected the work for contractual conformity.

Did the letter establish government-purchaser exemption?

It identifies a New Mexico village as the customer but does not cite or decide a separate governmental exemption. Its analysis turns on delivery, agency, and resale under section 6007.

What was the final tax result?

None is supplied. No supplemental facts, retail price, calculation, return, audit, assessment, claim, appeal, Board action, or later outcome identifies which conditional scenario occurred.

Citations and references

• California Revenue and Taxation Code section 6007 — quoted for retail sale, deemed California delivery sale, and retail-selling-price measure; complete authority, conditions, exceptions, procedures, amendments, later history, and current law not supplied
• September 13 request and January 7 response — no request, orders, contracts, agency or transaction records, tax calculation, supplemental determination, audit, assessment, claim, appeal, or later outcome supplied
• Official Annotation 325.0060's historical alternatives and date — omits provenance, statutory mechanics, unresolved posture, requested facts, missing records, later outcome, and reliance status and supplies no additional transaction record

Source

• Annotated Legal Opinions collection: https://cdtfa.ca.gov/taxes-and-fees/annotations-menu.htm
• Annotation page: https://cdtfa.ca.gov/lawguides/vol2/suta/325-0000-all.html
• Original supporting opinion: https://cdtfa.ca.gov/lawguides/annotations/325-0060.pdf

Original ruling text

325.0060

STATE OF CALIFORNIA

STATE BOARD OF EQUALIZATION

January 7, 1955

Dear Mr. --This is in reply to your letter of September 13, 1954 to Mr. X---, XY Motor Division, 1931 Myrtle Ave., El Paso, Texas, with copy to us. You state that the Village of Lake Arthur, New Mexico, decided to purchase a fire truck. A XY truck was ordered through you. You, in turn, placed your order with the XY Motor Division and the order was filled by a truck from the Chevrolet plant at Van Nuys, California. The XY Motor Division delivered this truck to YZ., 2859 E. 50th street, Los Angeles, California, for the installation of fire fighting equipment. The California sales tax applies to retail sales of tangible personal property in this state. Section 6007 of the Sales and Use Tax Law defines a retail sale as “a sale for any purpose other than resale in the regular course of business.” That section also provides “The delivery in this state of tangible personal property by an owner or former owner thereof or by a factor, if the delivery is to a consumer pursuant to a retail sale made by a retailer not engaged in business in this state, is a retail sale in this state by the person making the delivery. He shall include the retail selling price of the property in his gross receipts.” The XY Motor Division is an owner or former owner of tangible personal property in question. You are a retailer not engaged in business in this state and you have made a retail sale. Accordingly, the XY Motor Division is deemed to have made a retail sale and the XY Motor Division must pay tax on the retail selling price if it makes delivery in this state to a consumer (your customer or your customer’s agent). If your customer made its own contract with YZ, and if your customer’s contract with you was simply to purchase a truck and have it delivered to YZ. In Los Angeles, then the tax would apply as set forth in Section 6007 quoted above. If your contract with the customer was to sell a completely equipped fire truck and if you made the agreement with the YZ and if you made the agreement with the YZ and if you made arrangements for having the truck driven from Los Angeles to New Mexico, then YZ would be your agent rather than an agent of the customer, in which case XY Motor Division would be regarded as making a delivery to a retailer (exempt sale for resale) rather than a delivery to a consumer (taxable retail sale). If you believe that the transaction is exempt or if the facts do not fit into one of the situations which we have explained in this letter, we shall give further consideration to a more detailed statement you might wish to make. Such statement should include the identity of the person driving the unit from Los Angeles to New Mexico, the person from

whom this driver works, a description of the contractual arrangement with YZ (who made payment and who inspected for conformance to contract), etc.

Very truly yours,

Bill Holden
Assistant Counsel

BH:ja