Was a sale exempt when export goods showed their foreign destination and the seller delivered them to a carrier supplied by the purchaser?

Plain-English summary

A redacted California seller wrote on October 14 and December 5 before the Board's January 6, 1953 response. Those letters supplied the facts and attached a sample purchase order from a redacted purchaser. None is reproduced.

Under the sample order, the seller would mark either the goods or their export shipping cases with the foreign destination, then deliver them to a carrier supplied by the purchaser to receive them for shipment abroad without further processing or packaging. The source identifies no goods, destination, carrier or completed shipment.

Tax counsel concluded that tax did not apply when the seller delivered those marked goods to the purchaser-provided carrier for shipment abroad without further processing or packaging. On those facts, delivery to the carrier was the first step in exportation and brought the sale within the rule of Richfield Oil Co. v. State Board of Equalization, 329 U.S. 69.

Counsel cautioned that determining when an export sale begins was difficult and was the subject of then-pending litigation, which the PDF does not identify. The answer was therefore conditional on the stated purchase-order, marking, carrier and no-further-processing facts rather than a documented disposition of an identified sale.

The live annotation preserves those conditions and the January 6 date but omits the two request letters, sample-order provenance, Richfield Oil citation, pending-litigation caution, absent transaction proof and later-outcome gap.

Common questions

Did any purchaser-provided carrier qualify?

The letter addressed a carrier furnished to receive specifically marked goods for foreign shipment without further processing or packaging.

What had to show the foreign destination?

Either the goods themselves or the export shipping case in which they were packed, as required by the sample order.

Why did delivery to that carrier matter?

Counsel treated it as the first step in exportation under the stated facts and the cited Richfield Oil rule.

Was there proof of an actual export?

No. The source supplies no completed order, carrier receipt, shipment, customs record or other export evidence.

What pending litigation did counsel mention?

The letter says export-sale timing was then being litigated but gives no case name or citation.

Citations and references

• Richfield Oil Co. v. State Board of Equalization, 329 U.S. 69 — first-export-step authority as applied by counsel
• October 14 and December 5 letters and sample purchase order — described but not reproduced
• Unidentified pending export-sale litigation — mentioned without a case name or citation
• Official Annotation 325.0640 — publishes the conditional result while omitting material provenance and limits

Source

• Annotated Legal Opinions collection: https://cdtfa.ca.gov/taxes-and-fees/annotations-menu.htm
• Annotation page: Annotation 325.0640
• Original supporting opinion: https://cdtfa.ca.gov/lawguides/annotations/325-0640.pdf

Original ruling text

325.0640

STATE OF CALIFORNIA

STATE BOARD OF EQUALIZATION

January 6, 1953

E--- S--- Company
XXX --- Street
--- --- X, California
Attention:

Mr. Wm. T. M---

Account No. -- - XXXXXX

Gentlemen:
We acknowledge your letters of October 14 and December 5 and regret the delay in replying thereto. The determination of when a sale is exempt from sales tax as an export sale is not an easy matter and is the subject of litigation presently pending in the Courts. Upon review of the facts set forth in your letters and the sample purchase order attached thereto from K--- R--- D--- A--- L--- we are able to state that, in our opinion, the tax does not apply where, pursuant to the purchase order, you mark the goods or the shipping case in which they are packed for export, the foreign destination being shown thereon, and deliver the goods to a carrier provided by the purchaser for the purpose of receiving the goods for shipment abroad without further processing or packaging. It appears that under these circumstances delivery by you to the carrier furnished by the purchaser marks the first step in the exportation of the goods, thus bringing the transaction within the rule of the United States Supreme Court decision in Richfield Oil Company v. State Board of Equalization, 329, U. S. 69. Very truly yours,

E. H. Stetson
Tax Counsel

EHS:ph
cc:

--- --- – Tax Administrator