Was a California-side store sale exempt when a Mexican resident picked up the goods, crossed the border and obtained an export declaration?

Plain-English summary

Mexican residents crossed the border, bought merchandise at a store on the California side, received the goods from the retailer there and later carried them into Mexico. The memorandum also contemplated issuance of an export declaration.

The memorandum found no sales-tax exemption. Actual border crossing and an export declaration did not themselves determine that no tax applied. The writer knew of no court decision extending a constitutional sales-tax exemption that far and said the district's international-boundary difficulty did not change the law.

It then quoted an unidentified recent memorandum. That different, redacted transaction said title apparently transferred before tanker loading for a foreign port, so the sale preceded the event beginning foreign movement.

Richfield treated vendor-tank delivery directly into a vessel's hold as the start of movement abroad. Empresa rejected mere export intent, plan or integrated future events. Coe required shipment, common-carrier entry or commencement of a continuous transportation route or journey.

Applied to the store transactions, California retailer delivery to the purchaser occurred before any qualifying export journey. Later purchaser transport and export paperwork did not cure that sequence.

No particular goods, price, contract, declaration, border crossing, foreign receipt, tax amount or proceeding is supplied. The live annotation publishes the quoted cases but omits the direct store-delivery facts and the recent-memorandum evidence layer.

Common questions

Did an export declaration itself exempt the sale?

No. The memorandum expressly said actual purchaser border transport and issuance of an export declaration did not by themselves determine that no sales tax applied.

Why did California store pickup matter?

The retailer delivered the goods to the purchaser at the California-side store before the goods had begun a qualifying export movement.

What delivery began export in Richfield?

The quoted passage identifies vendor-tank delivery directly into the vessel's hold as the start of movement abroad.

Was an intent or complete plan to export enough?

No. The Empresa quotation rejects intent, a plan or an integrated series of events that would end in export without the required movement.

What movement did Coe describe?

Shipment, entry with a common carrier for another-state transportation, or the start of such transportation in a continuous route or journey.

Were the tanker facts the same border-store transactions?

The source does not say so. They appear only inside a quotation from a different recent memorandum and remain redacted.

Citations and references

• Richfield Oil Company v. State Board of Equalization, 329 U.S. 69 — vendor-to-hold movement start
• Empressa Siderurgica v. County of Merced, 337 U.S. 154 — source spelling; reporter resolves to Empresa
• Coe v. Errol, 116 U.S. 517 — shipment/common-carrier/continuous-journey language
• November 14 and recent internal memoranda — both identified but not reproduced
• Official Annotation 325.1360 — publishes the purchaser-transport rule and case quotations

Source

• Annotated Legal Opinions collection: https://cdtfa.ca.gov/taxes-and-fees/annotations-menu.htm
• Annotation page: Annotation 325.1360
• Original supporting opinion: https://cdtfa.ca.gov/lawguides/annotations/325-1360.pdf

Original ruling text

325.1360

STATE OF CALIFORNIA

STATE BOARD OF EQUALIZATION

December 12, 1950

Your Memo of November 14, 1950
Confirming our discussion of the matter in your office last week, this is to advise that we can find no basis for sales tax exemption with respect to transactions wherein a resident of Mexico comes across the border and makes a purchase at a store on the California side of the line, the retailer delivering the goods purchased to the purchaser at the store. The fact that the merchandise may actually be taken across the border by the purchaser and an export declaration issued does not in itself determine that there shall be no sales tax imposed with respect to the sale. We do not know of any Court decisions going that far in upholding exemption from a sales tax based upon constitutional grounds. We appreciate the difficulty of the situation in your district because of the international boundary, but this fact does not alter the applicable law, and we stated in a recent memorandum “It is our opinion that the goods do not become exports until after they have been delivered to the [purchaser]... probably not until they are placed on the tanker that is to take them to [a foreign port]. Since the transfer of title to [purchaser] apparently occurred prior thereto ... it would appear that the sale precedes the happening of the event that marks the commencement of the movement of the goods abroad. The Court in the Richfield case (Richfield Oil Company v. State Board of Equalization, 329 U.S. 69) said 'Delivery was made into the hold of the vessel from the vendor's tanks located at the docks. That delivery marks the commencement of the movement of the oil abroad.' It would thus appear that the vendor could not claim exemption merely because 'there is an intent to export, or a plan which contemplates exportation, or an integrated series of events which will end with it'. (Empressa Siderurgica v. County of Merced. 337 U.S. 154.) It seems that under the facts there is an intent or plan to export but it does not appear that the goods 'have been shipped or entered with a common carrier for transportation to another state or have started upon such transportation in a continuous route or journey'. (Coe v. Errol, 116 U.S. 517.)"

EHS:ph