Did assumed exclusive newspaper use make a printing-press sale occasional when the publisher made several equipment sales?

Plain-English summary

A newspaper publisher sold a Duplex flat-bed press to a redacted buyer in November 1950. A district-office report said it was one of three printing-equipment transactions from November 1, 1950 through February 14, 1951. Because the December 1 transfer included two items, counsel said the record showed three or possibly four sales. Their total was $12,684.

Board counsel assumed the press had been used exclusively to print a newspaper and therefore came within the property-use part of the occasional-sale definition. The sale still failed section 6006.5(a) because it was one of a series sufficient in number, scope, and character to require a seller's permit.

The letter states the Board's administrative position at the time: three or more sales within any twelve months generally constituted a permit-requiring activity. Counsel therefore would not recommend that the Board approve the claim for refund of tax paid on the press sale.

Determination, assumption, sale count, and source limits

Tax Counsel E. H. Stetson wrote the redacted publisher on November 23, 1951, referring back to a November 8 Board letter and a newly received report from an unnamed district office. The report supplied the facts used to include the November 1950 press sale in the measure of a May 23, 1951 deficiency determination.

The three identified transaction dates or periods were November 1950 for the Duplex press, December 1, 1950 for a transfer to F. W---, and February 14, 1951 for a transfer to C--- J---. The first sale was to J. H--- of S. N---. The December transfer covered two unidentified items, and the report did not make clear whether that was one sale or two. Counsel therefore counted three or possibly four sales between November 1 and February 14, less than four months, totaling $12,684.

The exclusive newspaper use was an assumption, not a factual finding reproduced in the source. Counsel said that assumed use brought the press within the part of section 6006.5 defining an occasional sale as a sale of property not held or used in a seller's-permit activity. Section 6006.5(a)'s separate series rule nevertheless prevented occasional-sale treatment when the sales were sufficient in number, scope, and character to constitute a permit-requiring activity.

Counsel described an administrative position that three or more sales in any twelve-month period were generally enough. Applying that position to this series, Stetson said staff was not in a position to recommend refund approval. The letter does not reproduce a final Board order granting or denying the claim.

The PDF omits the November 8 letter, district report, deficiency determination, refund claim, seller's-permit record, newspaper and use evidence, purchase and sale agreements, invoices, equipment descriptions beyond the press, individual prices, payment and delivery records, tax measure and calculation, tax-payment proof, Board submission and action, refund disposition, appeal, and later outcome. It does not explain the lowercase may in its reference to the May 23 determination.

The live annotation states that the press was used exclusively in printing an exempt newspaper, was one of a series sufficient to require a permit, and was taxable, with the November 23, 1951 date. The supporting letter itself calls the publication a newspaper, treats exclusive use as an assumption, and states only that counsel would not recommend approving the refund. The annotation omits the prior letter and district-report provenance, determination and refund posture, three-or-four-sale uncertainty, dates, two-item transfer, $12,684 total, administrative three-sale position, missing records, final-outcome gap, and reliance status.

What this means for you

Publishers selling printing equipment

Under this historical staff view, assumed qualifying use of the equipment did not end the analysis. Multiple asset sales within a short period could independently create seller status.

Accountants and tax professionals

Count transactions and transferred items carefully over the relevant twelve months and preserve the agreements and invoices that show whether a multi-item transfer was one sale or several. Do not treat this 1951 administrative position as current law without checking current authorities.

Common questions

Q: What equipment was at issue?
A: A Duplex flat-bed press.

Q: Was exclusive newspaper use established?

A: No. Counsel expressly assumed that fact for the analysis; the reproduced letter supplies no use records.

Q: How many sales did counsel count?

A: Three or possibly four in less than four months. One transfer included two items, and the source says it was unclear whether that was one sale or two.

Q: What was their total amount?
A: $12,684.

Q: Why did the sale fail occasional-sale treatment?

A: Counsel applied section 6006.5(a)'s series rule and the Board's stated administrative position that three or more sales in any twelve months were generally sufficient to require a seller's permit.

Q: Did the Board finally deny the refund?

A: The source does not show. It only says counsel was not in a position to recommend approval.

Q: Does the source show the tax amount?

A: No. It gives the combined sale amount but not the taxable measure, rate, tax paid, or refund claimed.

Citations and references

• California Revenue and Taxation Code § 6006.5 and subsection (a)
• November 8, 1951 Board letter — referenced but not included
• Unnamed district-office report — described as the basis for including the press sale, but not included
• May 23, 1951 deficiency determination and refund claim — referenced but not included
• Press and other equipment sale records, seller's permit, newspaper-use evidence, tax calculation and payment, Board action, appeal, and later outcome — described or implicated but not included

Verbatim support

From the official November 23, 1951 Tax Counsel letter:

Actually two items were sold to Mr. W--- and it is not clear whether this was one or two sales.

Accordingly, even assuming that the press sold to Mr. H--- was used exclusively in the printing of a newspaper, thus bringing it within that part of Section 6006.5 of the Sales and Use Tax Law defining an occasional sale as a sale of property not held or used in the course of an activity for which a seller's permit is required, the fact that it was one of several sales made within the period indicated brings it, in our opinion, within the provision of Section 6006.5(a) that a sale is not an occasional sale if it is one of a series of sales sufficient in number, scope, and character to constitute an activity requiring the holding of a seller's permit.

It is our administrative position that the making of three or more sales in any twelve-month period is generally sufficient to constitute an activity requiring the holding of a seller's permit.

In the matter at hand, three or possibly four sales in the total amount of $12,684.00 were made within a period of less than four months.

Accordingly, it does not appear that we are in a position to recommend to the Board that your claim for refund of tax paid with respect to the press sold to Mr. H--- be approved.

Source

• Annotated Legal Opinions collection: CDTFA Annotated Legal Opinions
• Annotation page: Annotation 395.0660
• Original supporting opinion: 395.0660 PDF

Original ruling text

395.0660

STATE OF CALIFORNIA

STATE BOARD OF EQUALIZATION

November 23, 1951
The N--- O--XXX --- XXth Street
--- ---, California
Attention:

Mr. A. K---, Publisher

Account No. C-XXXXX

Gentlemen:
With further reference to our letter to you of November 8 we are now in receipt of a report from our --- District Office setting forth the facts upon the basis of which the sale of the Duplex flatbed press made to Mr. J--- H--- of the S--- N--- in November 1950 was included in the measure of the Board’s deficiency determination of may 23, 1951. This report indicates that the sale was included because it was one of three sales of printing equipment made between November 1, 1950 and February 14, 1951. The other two sales were made on December 1, 1950, to F. W--- and on February 14, 1951 to C--- J---. Actually two items were sold to Mr. W--- and it is not clear whether this was one or two sales. Accordingly, even assuming that the press sold to Mr. H--- was used exclusively in the printing of a newspaper, thus bringing it within that part of Section 6006.5 of the Sales and Use Tax Law defining an occasional sale as a sale of property not held or used in the course of an activity for which a seller’s permit is required, the fact that it was one of several sales made within the period indicated brings it, in our opinion, within the provision of Section 6006.5(a) that a sale is not an occasional sale if it is one of a series of sales sufficient in number, scope, and character to constitute an activity requiring the holding of a seller’s permit. It is our administrative position that the making of three or more sales in any twelve-month period is generally sufficient to constitute an activity requiring the holding of a seller’s permit. In the matter at hand, three or possibly four sales in the total amount of $12,684.00 were made within a period of less than four months. Accordingly, it does not appear that we are in a position to recommend to the Board that your claim for refund of tax paid with respect to the press sold to Mr. H--- be approved. Very truly yours,

E. H. Stetson
Tax Counsel
EHS:ph
cc:
Mr. John B. Evans (CLH)