Did naming the purchaser instead of the seller as consignor on a bill of lading make an otherwise interstate shipment taxable?

Plain-English summary

Tax counsel confirmed views given in a recent telephone conversation with a corporate excise-tax supervisor. Neither the call nor any underlying transaction record is supplied. The letter said the historical interstate-sale conditions did not require a bill of lading to name the seller rather than the purchaser as consignor; the purchaser's name in that field was not controlling by itself.

The seller still had to prove the substance of the transaction: under the sales contract, the seller delivered the goods to a carrier for shipment to an out-of-state point, and the goods actually were delivered and shipped that way.

If the purchaser instead obtained possession and control of the goods in California before carrier delivery, the sale was taxable. The source applies historical Ruling 55 A-1-(c) and carries a later note stating that the rule is now Regulation 1620.

Ruling 55 A-1-c is not reproduced. The later “Now Reg. 1620” footnote identifies neither the corresponding subsection nor when or by whom the note was added. No contract, goods, bill of lading, carrier record, destination, delivery proof, taxable measure, tax proceeding, or later outcome is included.

Common questions

Did the consignor label alone control?

No. Naming the purchaser rather than the seller as consignor did not by itself make tax apply.

What still had to be established?

The contract had to require seller delivery to a carrier for an out-of-state destination, and the goods actually had to be delivered and shipped that way.

What would make the sale taxable?

Purchaser possession and control in California before seller delivery to the carrier would produce the taxable result described in the letter.

Does the PDF show that a particular shipment qualified?

No. It supplies no transaction, contract, bill of lading, carrier, destination, delivery or tax record.

Does the footnote establish today's exact rule?

No. It says only “Now Reg. 1620” and supplies no subsection, replacement text, date or later history.

Citations and references

• California Sales and Use Tax Ruling 55 A-1-c — cited for historical interstate-sale conditions; rule text, complete conditions, amendments, later history, and current law not supplied
• California Sales and Use Tax Regulation 1620 — named only in an undated later footnote; exact subsection, text, effect, later history, and current law not supplied
• Telephone call and transaction records — not reproduced or absent; contract, goods, bill, carrier, destination, delivery, possession, control, measure and outcome remain unproved
• August 20 response — general and conditional, with no applied tax proceeding or later result
• Official Annotation 325.0280 — states the conditional rule but omits the provenance, missing authority and records, footnote uncertainty, outcome, and reliance status

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/325-0280.pdf

Original ruling text

325.0280

STATE OF CALIFORNIA

STATE BOARD OF EQUALIZATION

August 20, 1951

W. N--- L--Excise Tax Supervisor
S--- O--- C--- of C--S--- O--- Building
--- --- XX, California
X XXXX
Dear N---:
This will confirm the views which I expressed to you in our recent telephone conversation that a sale is made in interstate commerce pursuant to Ruling 55* if the conditions specified in Par. A., 1., (c) of that ruling are present. These conditions do not include the requirement that the bill of lading show the vendor rather than the purchaser as the consignor. Even though the purchaser is shown as consignor, we will not regard the tax as applicable provided it can be established that the vendor, pursuant to the contract of sale, delivered the goods to a carrier for shipment to a point outside this State and the goods were so delivered and shipped. However, if the goods come into the possession and control of the purchaser in this State rather than being delivered to the carrier by the seller, we would regard the tax as being applicable.

Very truly yours,

E. H. Stetson
Tax Counsel

EHS:ms

*Now Reg. 1620.