Did a finite delay to consolidate goods with other goods already collected end a begun export journey?

Plain-English summary

An unidentified taxpayer petitioned for redetermination. After an April 23 letter supplied more information, tax counsel reconsidered an original report and recommended granting the petition.

Counsel rejected the broad claim that plain certainty of foreign destination alone made property exempt export, citing Empresa Siderurgica. The official PDF misspells the name “Siderurgiea”; its reporter resolves to the correctly named case.

The relevant question instead was whether an export journey had actually begun and whether a later delay interrupted it.

Once the journey began, a transit delay did not terminate it unless the delay served a purpose independent of transportation. An indefinite wait to collect other goods for a later shipment could be such an independent purpose.

Here, the understood purpose was to consolidate the property with other goods already collected for shipment, and the delay was not indefinite. Counsel therefore revised the recommendation.

A reaudit was to delete the protested item from the tax measure, followed in due course by a notice of redetermination reflecting that action. Neither the reaudit nor notice is supplied, so the source does not establish final grant or later outcome.

The live annotation publishes the delay rule but omits the petition, recommendation, promised reaudit and future-notice posture.

Common questions

Was foreign-destination certainty enough by itself?

No. Counsel expressly rejected that proposition under Empresa Siderurgica.

What kind of delay could end an export journey?

A delay serving a purpose independent of transportation. Counsel said an indefinite wait to collect other goods for shipment would seem to qualify.

Why did this consolidation delay not end the journey?

It was not indefinite and consolidated the goods with other goods already collected for shipment, rather than waiting to gather future goods.

Did counsel finally grant the petition?

No final order appears here. Counsel recommended grant, promised a reaudit and said a later notice of redetermination would reflect the action.

What transaction evidence is supplied?

None beyond counsel's short description. The property, contract, shipment, goods consolidated, duration, destination, proof, tax item and audit records are absent.

Citations and references

• Empresa Siderurgiea v. County of Merced, 337 U.S. 154 — official-source spelling; reporter resolves to Empresa Siderurgica
• April 23, 1970 supplemental letter and original report — identified but not reproduced
• Reaudit and notice of redetermination — promised but not supplied
• Official Annotation 325.1330 — publishes the finite-versus-independent-delay rule

Source

• Annotated Legal Opinions collection: https://cdtfa.ca.gov/taxes-and-fees/annotations-menu.htm
• Annotation page: Annotation 325.1330
• Original supporting opinion: https://cdtfa.ca.gov/lawguides/annotations/325-1330.pdf

Original ruling text

325.1330

STATE OF CALIFORNIA

STATE BOARD OF EQUALIZATION

May 7, 1970

Attention:
Gentlemen:
We have given further consideration to your petition for redetermination in light of the information submitted with your letter of April 23. We have decided to revise our original report and recommend that the petition be granted. We cannot agree with your conclusion that property qualifies as an exempt export merely because the certainty of the foreign destination is plain (see Empresa Siderurgiea v. County of Merced, 337 U.S. 154). However, we do agree with your contention that once an export journey is begun it is not terminated by a delay in transit unless the delay is for a purpose independent of the transportation of the property. It would seem that an indefinite delay in transportation for the purpose of collecting other goods for shipment would represent such an independent purpose. In the instant case, we understand that the delay in shipment was for the purpose of consolidating the goods for shipment with other goods already collected and was not for an indefinite period. It is on this basis that we have revised our recommendation. A reaudit will be conducted deleting the protested item from the measure of tax. In due course you will receive a notice of redetermination which will reflect the action indicated.

Very truly yours,

W. E. Burkett
Tax Counsel

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