Was a building owner liable under the concessionaire rule for charitable organizations' rummage sales held by tenants?

Plain-English summary

A building owner apparently wrote that she had been told she would owe tax on rummage sales conducted in her building by various charitable organizations. The owner's enclosed letter is absent, and Tax Counsel cautioned that she might not have stated the facts correctly.

Tax Counsel E. H. Stetson told the Downey subdistrict administrator that a mere landlord was not subject to former Ruling 79's rule holding a retailer liable for tax on concessionaire sales.

Because the facts remained uncertain, counsel directed field staff to investigate and take any necessary action to require payment from the actual sellers. That direction had two stated limits: former Ruling 40 might exempt the sales, or the sales might be too limited to constitute engaging in business.

The memo does not decide whether the owner was only a landlord, whether any charity was a concessionaire or retailer, whether either exception applied, or whether tax was ultimately due or paid.

Source posture and current cross-reference

The live 410.0060 annotation states only that a mere landlord is not subject to provisions holding a retailer liable for sales by unpermitted concessionaires where charities use the building for rummage sales. It omits the absent owner letter, counsel's warning that the facts might be misstated, the field-investigation directive, the Ruling 40 and business-frequency exceptions, and the absence of any outcome.

The collection now places this annotation under Regulation 1699. Current subdivision (d) says that a lessor or grantor that is not a retailer is not liable for the lessee's or grantee's sales or use taxes; it also supplies modern concessionaire definitions, separate-business indicators, prime-retailer liability and permit-statement relief. Those provisions are a current reference, not facts or holdings supplied by the 1964 memo.

The official one-page PDF has a clean native text layer and no image, so no OCR was required. Two fresh direct downloads and default text extractions matched exactly. The original-text section remains byte-identical to its committed version and matches fresh extraction after removing only terminal extractor whitespace.

What this means for you

Landlords, charities, and event operators

The memo distinguishes a mere landlord from the actual sellers, but it does not establish that the owner in question ultimately satisfied that description. Document the premises arrangement, each seller's identity and permit, who controls and appears to conduct the retail business, and the facts supporting any current charitable or occasional-sale treatment.

Common questions

Q: Was a mere landlord liable under Ruling 79?

A: No, according to Tax Counsel's historical view.

Q: Did counsel accept the owner's account as established fact?

A: No. He said the absent letter's writer might not have stated the facts correctly and ordered staff to investigate.

Q: Who should be reviewed for tax?

A: The actual sellers, if the investigation showed payment was required.

Q: What exceptions did counsel identify?

A: Sales exempt under former Ruling 40 or sales too limited to constitute engaging in business.

Q: Did the source decide whether either exception applied?

A: No. It supplies no charity-specific facts, sales frequency, investigation or outcome.

Citations and references

• Former California Sales and Use Tax Ruling 79 — historical concessionaire-liability rule discussed but not reproduced
• Former California Sales and Use Tax Ruling 40 — possible sales exemption identified but not reproduced or applied
• California Code of Regulations, title 18, § 1699(d) — current live concessionaire and lessor provision, not cited in the 1964 memo
• Owner's letter; owner, charity and building identities; leases and control records; sale dates and frequency; merchandise, donors, customers, sales and prices; seller's permits; exemption evidence; returns; tax amount; investigation; assessment; payment; appeal and outcome — described or implicated but not included

Verbatim support

From the official April 16, 1964 Tax Counsel memorandum:

I do not think that a mere landlord is subject to the provisions of Ruling 79 holding a retailer liable for tax on sales made by concessionaires.

Perhaps the writer of the letter did not correctly state the facts.

In any event, please look into this matter and take any necessary action to require the payment of tax by the actual sellers, unless the sales are exempt under Ruling 40, or are insufficient to constitute engaging in business.

Source

• Annotated Legal Opinions collection: CDTFA Annotated Legal Opinions
• Live annotation: Annotation 410.0060
• Original supporting opinion: 410.0060 PDF
• Current cross-reference: Regulation 1699

Original ruling text

State of California

Board of Equalization

Memorandum

To:

Downey – Subdist. Admin.

From:

Tax Counsel (EHS)

Subject:

“W”

410.0060

Date:

April 16, 1964

Enclosed is a copy of a letter from the owner of a building used for rummage sales. Apparently, the owner was told that she would be liable for the tax on sales by the various charitable organizations using the building. I do not think that a mere landlord is subject to the provisions of Ruling 79 holding a retailer liable for tax on sales made by concessionaires. Perhaps the writer of the letter did not correctly state the facts. In any event, please look into this matter and take any necessary action to require the payment of tax by the actual sellers, unless the sales are exempt under Ruling 40, or are insufficient to constitute engaging in business.

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