Did a California f.o.b. point prevent exemption when a retailer contracted to ship goods to an out-of-state consumer?

Plain-English summary

An unidentified correspondent asked generally whether a California retailer's sale to an out-of-state consumer could qualify under historical Ruling 55 A-1-(c) when the contract required outside shipment but used an f.o.b. point within California.

Assistant counsel said the f.o.b. point could be either inside or outside California. The sale remained exempt under the cited rule if the contract required out-of-state shipment, the goods actually were shipped out of state, and the retailer delivered them to the carrier.

The response supplies no retailer, consumer, goods, contract, f.o.b. clause, carrier, shipment, invoice, price, tax measure or applied outcome. It is a conditional rule, not approval of a completed transaction.

The live annotation preserves the same three conditions and date but omits the historical Ruling 55 section label, unidentified request, missing evidence and unapplied posture.

Common questions

Did an in-state f.o.b. point automatically defeat the exemption?

No. Counsel said the f.o.b. point could be within or outside California if all three shipment conditions were met.

What did the contract have to require?

Shipment of the goods outside California.

Was a contractual promise alone enough?

No. The goods also had to be shipped outside California in fact.

Who had to deliver the goods to the carrier?

The retailer, under the cited historical rule.

Did counsel approve a particular sale?

No. The source contains no contract, delivery, carrier record, shipment proof or tax result for any actual transaction.

Citations and references

• California Sales and Use Tax Ruling 55 section A-1-(c) — cited for the three shipment conditions regardless of f.o.b. point; full rule, replacement history and current law not supplied
• Request and transaction records — absent; requester, parties, goods, contract, carrier, shipment, price and tax records remain unproved
• December 18 response — general and conditional, with no applied measure, proceeding or later result
• Official Annotation 325.0480 — preserves the three-condition rule but omits its provenance and evidentiary limits

Source

• Annotated Legal Opinions collection: https://cdtfa.ca.gov/taxes-and-fees/annotations-menu.htm
• Annotation page: Annotation 325.0480
• Original supporting opinion: https://cdtfa.ca.gov/lawguides/annotations/325-0480.pdf

Original ruling text

325.0480

STATE OF CALIFORNIA

STATE BOARD OF EQUALIZATION

December 18, 1952

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Gentlemen:
You inquire whether a sale by a California Retailer to an out-of-State consumer is exempt under Section A-1-(c) of Sales and Use Tax Ruling 55 if the contract provides for out-ofState shipment with an f.o.b. point whithin this State. A sale may have an f.o.b. point either within or without this State and still be exempt under Section A-1(c) as long as the conditions of that ruling are complied with. The contract must provide for out-State shipment, the goods must be so shipped, and the retailer must deliver the goods to the carrier. Very truly yours,

W. W. Mangels
Assistant Counsel

HBH:ja
cc:

Oakland - Auditing