Were matches for stores on an interstate or foreign-commerce tanker exempt when its operator took possession in San Francisco?

Plain-English summary

A redacted Massachusetts company's accounting department sent an August 18 letter asking about one sale of matches for ship stores on an ocean-going tanker engaged in interstate or foreign commerce. The source supplies no year for that letter and does not reproduce it.

The stated decisive fact was that the tanker operator took possession of the matches in San Francisco.

Junior counsel enclosed historical Sales and Use Tax Ruling 55 but that enclosure is absent. He said the sale did not fall within section A-1-(d)'s exemption and was therefore taxable under section A-2-(b), without quoting either provision or explaining their tests.

The live annotation states a broader rule for “merchandise” on an “ocean-going vessel” with possession anywhere in California. It also changes the supporting letter's “interstate or foreign commerce” to “interstate and foreign commerce.” Neither source explains whether those generalizations or the conjunction change were intended to alter scope.

Common questions

Were all ship-store purchases taxable?

The source does not say. It decides one match-sale question where the tanker operator took possession in San Francisco.

Why did California possession matter?

Counsel treated it as placing the sale outside Ruling 55 section A-1-(d) and within section A-2-(b), but the missing ruling is needed for the full reasoning.

Did intended later interstate or foreign use create exemption?

Not on the stated facts. The letter still called the sale taxable despite its described tanker-store use.

What did sections A-1-(d) and A-2-(b) require?

The PDF does not say. It cites the section labels and says a copy was enclosed, but CDTFA's supporting PDF does not include the enclosure.

Did the PDF cover merchandise other than matches?

No other product is identified. “Merchandise” appears only in the shorter live annotation.

Was the tax actually assessed or paid?

No return, tax amount, audit, assessment, payment, refund or later proceeding is supplied.

Citations and references

• California Sales and Use Tax Ruling 55, Interstate and Foreign Commerce — enclosed, not reproduced
• Ruling 55 section A-1-(d) — exemption said not to apply, with no text or comparison
• Ruling 55 section A-2-(b) — taxable treatment cited, with no text or comparison
• August 18 requester letter — identified without year, not reproduced
• Official Annotation 325.1680 — generalizes product, craft and location and changes or to and

Source

• Annotated Legal Opinions collection: https://cdtfa.ca.gov/taxes-and-fees/annotations-menu.htm
• Annotation page: Annotation 325.1680
• Original supporting opinion: https://cdtfa.ca.gov/lawguides/annotations/325-1680.pdf

Original ruling text

325.1680

STATE OF CALIFORNIA

STATE BOARD OF EQUALIZATION

October 27, 1953

The D--- M--- Company
XXX --- Street
---, Massachusetts
Attention:

Mr. R. H--Accounting Department

Your letter of August 18
Account No. OS-X-XXXXX

Gentlemen:
You inquire concerning the application of sales tax to a sale of matches for use as ships stores on an ocean going tanker engaged in interstate or foreign commerce. The operator of the tanker takes possession of the matches in San Francisco. We enclose a copy of Sales and Use Tax Ruling 55, Interstate and Foreign Commerce. It is our opinion that the sale does not fall within the exemption stated in Section A-1-(d) of Ruling 55 and is therefore taxable under Section A-2-(b) of Ruling 55. Yours very truly,

Bill Holden
Junior Counsel

BH:ja

cc: