Did California treat a tipster as selling printed tip sheets or consuming the cards while performing a service?
Apply this to your situation
This page answers the general question as of 1952. Ask about yours and see what current California tax law says, with citations.
Plain-English summary
California reviewed “Tip Sheets” represented by an example attached to a Stockton field memorandum. The supporting PDF does not include the attachment, memorandum, or redacted August 18 correspondence.
The Board's historical policy treated the tipster as consuming the cards while performing a service, not as selling tangible personal property. On that premise, the printer printed the card for the tipster.
Assistant Counsel expressly said the matter was not free from doubt. The live annotation goes beyond the short memorandum by calling the printer's transaction the last taxable event, stating that the sheets were not exempt periodicals, and excluding established newspapers such as the Racing Form from its rule.
Source and live-annotation limits
The official PDF does not include the August 18 correspondence, Stockton memorandum, attached tip sheet, publication schedule, card, tipster or printer identity, service agreement, customer, price, invoice, printing transaction, sale, return, tax calculation or payment, audit, assessment, claim, appeal, basis for prior Board policy, or later outcome. Its subject line and parties are partly redacted.
The source prints “Sale Tax Counsel,” “Original --- (Application of Sales Tax to ‘Tip Sheets)” with unmatched punctuation, and “Your are advised.” The original-text section preserves those forms rather than silently correcting them.
The live annotation preserves the consumer/service conclusion and adds the printer-as-last-taxable-event, nonperiodical, and Racing Form distinctions. It omits the August 18 correspondence, Stockton and Headquarters routing, redacted subject, attached example, Board's past-policy characterization, express doubt, missing records, redactions, and outcome limits.
What this means for you
Tip services, information sellers, printers, and tax professionals
Determine whether the customer buys information services or printed property and identify who consumes the physical medium. Preserve the tip sheet, publication schedule, service and printing contracts, prices, invoices, returns, and tax analysis. Treat this historical source cautiously because counsel expressly flagged uncertainty.
Common questions
Q: Who did California treat as the consumer of the cards?
A: The tipster.
Q: Did counsel regard the tipster as selling tangible property?
A: No.
Q: Was the conclusion expressed with confidence?
A: No. Counsel said the matter was not free from doubt.
Q: Did the supporting memorandum itself call the printer's sale the last taxable event?
A: No. That fuller tax statement appears in the live annotation.
Q: Did the rule cover the Racing Form?
A: The live annotation says it applies only to tip sheets, not established newspapers such as the Racing Form.
Citations and references
- Redacted August 18 correspondence — year, author, form, and copy absent
- Tip sheet attached to the Stockton memorandum — title, date, content, and copy absent
- Prior Board policy treating the tipster as card consumer — authority, facts, and copies unidentified
- Live-annotation additions concerning the printer, periodical status, and Racing Form — not stated in the supporting memorandum
Verbatim support
From the official Assistant Counsel memorandum:
In other words, he is not regarded as selling tangible personal property
While the matter is not free from doubt, this has been the policy of the Board in past years.
Source
- Annotated Legal Opinions collection: CDTFA Annotated Legal Opinions
- Annotation page: Annotation 385.0680
- Original supporting opinion: 385.0680 PDF
Original ruling text
385.0680
STATE OF CALIFORNIA
STATE BOARD OF EQUALIZATION
Sacramento
September 30, 1952
To:
Stockton – Tax Administrator
From:
Headquarters – Sale Tax Counsel
Subject:
Original --- (Application of Sales Tax to “Tip Sheets)
Your are advised, in reply to --- --- --- of August 18, that “Tip Sheets”, such as --- --- --attached to your memorandum, are regarded as consumed by the “tipster” in performing a
service. In other words, he is not regarded as selling tangible personal property
While the matter is not free from doubt, this has been the policy of the Board in past
years. Accordingly, the printer prints the card for the “tipster”.
W. W. Mangels
Assistant Counsel
WWM:cn
What does the law say today, for your facts?
This ruling is from 1952. Ezel checks current California tax law against your situation and cites the authority it relies on.
Opens in Ezel Pro.
- Checks the law as it stands today, not only this page
- Cites every source it relies on, so you can verify it
- Chat, drafting and research in one workspace