Was a California television sale exempt merely because the buyer's mover later picked it up with household goods bound for Canada?

Plain-English summary

A redacted British Columbia purchaser's January 15, 1969 letter concerned a television bought in California and shipped by common carrier with household goods to Canada. The request is absent. A supplied December 26 invoice numbered 498431 from redacted store 228 recorded a cash sale of one Motorola television to the British Columbia address and $28 sales tax. It had spaces for shipping or special instructions but none were entered, so counsel could only assume none were given at sale.

A supplied December 27 household-goods inventory listed many items and ended with a color television to be picked up at the retailer's California warehouse; it showed a British Columbia destination. The published letter says it returned the invoice and inventory copies, so neither attachment is reproduced.

Tax counsel said the documents were insufficient for a definite answer. An exempt foreign-commerce sale required the sales agreement to show the contemplated export and the seller to follow the required procedure. The mover's inventory alone did not prove that the seller delivered the television to the carrier or that the carrier took it outside the continental United States without interruption.

If the seller had made the qualifying carrier delivery and retained the required records, tax would not apply. The buyer was directed to ask the seller about its policy for this transaction. If tax reimbursement was excessive, the cited historical rule required the amount to be refunded to the customer or remitted to the State. The source supplies no seller response, shipment proof, refund, remittance or later result.

The official document contains two source irregularities: page one identifies Annotation 325.0606, while continuation pages print 585.0280; and the case citation appears as “337 U.S. 1954,” which fresh legal-research list mode did not resolve. Both forms remain verbatim. The live annotation publishes the documentation principle as 325.0606 but omits the letter's express refusal to give a definite taxable-status opinion and its source defects.

Common questions

Did the Canadian address on the invoice prove an export sale?

No. The invoice contained no shipping or special instructions despite providing space for them.

Did the mover's inventory prove the exemption?

Not by itself. Counsel required proof of seller delivery to the shipper and uninterrupted carriage outside the continental United States.

Did counsel find the sale taxable?

No definite conclusion was given. The letter expressly said the available request and documents were inadequate to decide taxable status.

Who had to claim and support the exemption?

The seller, which needed to secure and retain the required documentary evidence.

What happened to the $28 reimbursement?

The source gives no later result. It says excessive reimbursement had to be refunded to the customer or remitted to the State under cited historical Ruling 80(c).

Are the cited rulings and supplied transaction documents included?

No. Copies of Rulings 55 and 80(c) were stated enclosures, and the invoice and inventory were returned; none appears in the official PDF.

Citations and references

• Sales and Use Tax Ruling 55 — historical foreign-commerce requirements; stated enclosure absent
• Empressa Siderurgica v. County of Merced, 337 U.S. 1954 — printed citation unresolved; no case passage supplied
• Sales and Use Tax Ruling 80(c) — historical excess-reimbursement rule; stated enclosure absent
• January 15 request, invoice and household-goods inventory — described, then returned rather than reproduced
• Official Annotation 325.0606 — preserves the documentation concern but omits the indeterminate answer and source defects

Source

• Annotated Legal Opinions collection: https://cdtfa.ca.gov/taxes-and-fees/annotations-menu.htm
• Annotation page: Annotation 325.0606
• Original supporting opinion: https://cdtfa.ca.gov/lawguides/annotations/325-0606.pdf

Original ruling text

325.0606

STATE OF CALIFORNIA

STATE BOARD OF EQUALIZATION

February 13, 1969

Mr. K. C. C--XXX E. XXth Avenue
---, XX, B.C.
Canada
SC --- XX XXXXXX
A--- R--- T--Co. Inc.
SY -- XX XXXXXX
W--- F--- F--Inc.
This is in response to your letter of January 15, 1969, regarding the application of tax to a television set purchased by you in --- ---, California, and shipped to Canada by way of common carrier (A--- R--- T--- Co., Inc.) along with your other household goods. Enclosed with your letter is a copy of sales invoice number 498431 prepared on December 26, 1968, by W--- F--- D--- store number 228, covering a cash sale to K. C. C---, XXX East XXth Avenue, ---, B.C. of one Motorola T.V. Sales tax of $28.00 was charged on the transaction. The invoice contains no shipping or special instructions. A copy of “Household goods descriptive inventory” form prepared by A--- R--- T--- Co., Inc., on December 27, 1968, also attached to your letter, lists numerous items of household goods the final entry of which is, “Color T.V.P.U. at W--- F--- Whse., --- ---, Calif.” The destination address shown on the form is “---, Canada, B.C.” From the above facts as we understand them, you purchased the T.V. from a California retailer presumably with the intent that it be shipped along with your other household goods to a Canadian address. The invoice of sale contains no shipping or special instructions, even though a space is provided thereon for such instructions. We can only assume that none were given at the time of sale.

Mr. K. C. C--(SC --- XX XXXXXX &
SY -- XX XXXXXX)

-2-

February 13, 1969
585.0280

Sales in interstate and foreign commerce are exempt from tax provided the transaction complies with the provisions of the enclosed ruling 55. In order for the exemption to apply, the goods must have been committed to foreign commerce at the time of sale. The exemption of exports does not depend on the intent of the purchaser but depends upon whether at the time of the transaction which is sought to be taxed, the goods are within the stream of foreign commerce. (Empressa Siderurgica v. County of Merced, 337 U.S. 1954.) If the transaction was intended to be an exempt sale in foreign commerce, it is necessary that the terms of the sales agreement be so constructed as to indicate the contemplation of a sale in foreign commerce thereby permitting the initiation of the proper procedure by the seller to cause the exemption from the tax to apply in accordance with the requirements of the ruling. The copy of the invoice and agreement submitted by you does not contain information nor instructions appropriate to effectuate the above required procedure. While the moving company (A--- R--- T--- Co.) noted on its “Household goods descriptive inventory” form that a T.V. was to be picked up at the W--- F--- warehouse, for shipment to Canada, this alone is not sufficient to constitute compliance with the requirement of ruling 55. Documentary evidence that the T.V. was in fact delivered to the shipper by the seller and that it was in fact carried outside the continental limits of the United States without interruption must be secured and retained by the seller, since exemption from the tax must be claimed and supported by the seller. If you are in possession of additional sufficient facts surrounding the transaction, which you feel constitutes compliance with the exemption requirements, we suggest you correspond with the seller for a determination of its policy concerning your particular transaction. If the seller has complied with the provisions of the ruling in a manner sufficient to cause the sale to be exempt and has secured and retained the necessary documentation, tax would not apply to the transaction. While the matter of a refund of tax to the customer is a contraction agreement between the seller and the customer, the law does provide that where tax reimbursement is in fact excessive, the amount of the excessive reimbursement must either be refunded to the customer or remitted to the State. (See ruling 80(c), copy enclosed.) The information available from your letter and attached documents is inadequate to enable us to express a definite opinion regarding the taxable status of the transaction involved.

Mr. K. C. C--(SC --- XX XXXXXX &
SY -- XX XXXXXX)

-3-

February 13, 1969
585.0280

We are returning the copies of the sales invoice and household goods descriptive inventory to you. Very truly yours,

T. P. Putnam
Tax Counsel
BY_____
Joseph Manarolla

JM:smb
Enclosures