Did a purchasing business need a California seller's permit when it bought solely for resale and foreign export to an affiliate?

Plain-English summary

An unidentified representative said a client bought merchandise from various U.S. states solely for export to an affiliated company in the Far East. The September 29 request called the client the affiliate's purchasing agent but also appeared to say it bought goods for its own account. Senior Tax Counsel John Abbott gave separate answers because those roles differ.

If the client truly acted as the affiliate's purchasing agent, it made no own-account purchases or sales and did not need a seller's permit. Transactions potentially subject to sales or use tax were instead between the vendors and the affiliate as purchaser. The source supplies no agency agreement, order, invoice, title, payment or reimbursement records proving that role.

If the client bought for its own account, it needed no Board seller's permit under Regulation 1699(b) only if its sales were exclusively for foreign export and therefore not sales made in California. It should give vendors the Regulation 1668(b) resale certificate. In place of a permit number, Regulation 1668(b)(1)(C) allowed a notation that it did not need a permit because all its sales were for export.

The own-account reseller also had to document every sale as an export under Regulation 1620(a)(3)(C) and retain evidence under subdivision (a)(3)(D) showing delivery to a carrier, customs broker or forwarding agent for export. The opinion supplies none of those certificates or delivery records and no registration, return, audit or later outcome.

The source says Regulations 1620, 1668 and 1699 were enclosed, but CDTFA's two-page PDF does not include them. Counsel expressly declined to advise whether other kinds of business permits were required.

Source posture

The live 410.0380 annotation, in the 2026 revision of the Business Taxes Law Guide, preserves only the own-account export-only branch: no permit, Regulation 1668 certificate and an all-sales-for-export notation. It omits the request's purchasing-agent ambiguity, true-agent branch, vendor-to-affiliate tax relationship, Far East affiliate, specific Regulation 1699(b) and 1668(b)(1)(C) references, Regulation 1620 documentation duties, missing enclosures and records, non-sales-tax-permit limitation, and absence of an applied outcome.

CDTFA's Annotated Legal Opinions collection says the letters are summarized as annotations and that statutory law controls whenever a statute and annotation conflict. The official two-page 410.0380 PDF has a clean native text layer and one small page-1 grayscale letterhead image, so no OCR was required. Both fresh direct PDF downloads and both live-annotation downloads were byte-identical, and duplicate default PDF text extractions matched. The original-text section below remains byte-identical to its committed version and matches the fresh official extraction after removing only the extractor's terminal newline and form feed.

What this means for you

Exporters, purchasing agents, and tax professionals

Document whether the business acts as agent or principal through contracts, ordering, title, invoicing and payment records. A principal must preserve an unbroken export-delivery record and support the all-sales-for-export condition. Check current agency, resale-certificate, export-delivery, customs, registration and filing rules; this opinion addresses no permit other than the Board seller's permit.

Common questions

Q: Did a true purchasing agent need a seller's permit?

A: No, because it was not buying and selling for its own account. The source supplies no agency records proving that status.

Q: Did an own-account reseller need a permit?

A: No only if all its sales were exclusively for foreign export and not made in California under the cited historical regulations.

Q: What could an export-only reseller put on its resale certificate?

A: In place of a permit number, a notation that it was not required to hold one because all its sales were for export.

Q: What export evidence did counsel identify?

A: Documentary evidence of delivery to the carrier, customs broker or forwarding agent for export.

Q: Did counsel decide whether any other permit was required?

A: No. The letter expressly declined to advise on permits other than a seller's permit.

Q: Does the source show an issued certificate, completed export or audit result?

A: No. The transaction, certificate, delivery, customs, registration, filing and outcome records are absent.

Citations and references

• California Sales and Use Tax Regulation 1620(a)(3)(C)-(D) — export characterization and delivery evidence described in the 1989 opinion
• California Sales and Use Tax Regulation 1668(b) and (b)(1)(C) — resale-certificate form and all-sales-for-export notation described in the opinion
• California Sales and Use Tax Regulation 1699(b) — export-only no-permit rule cited in the opinion
• Regulations 1620, 1668 and 1699 — stated enclosures absent
• September 29 request; client and affiliate identities; agency agreement; orders; invoices; title, payment and reimbursement records; resale certificates; carrier, broker, forwarding and customs records; permits; returns; audit; and outcome — described or implicated but not included

Verbatim support

From the official December 14, 1989 Senior Tax Counsel opinion:

Although you state that your client is a purchasing agent for its affiliated company, your letter also appears to indicate that your client is purchasing goods for its own account for resale to the affiliated company.

If your client were, in fact, a purchasing agent for the affiliated company, your client would not need to hold a seller’s permit, since it would not be making purchases and sales for its own account.

If your client purchases goods for its own account exclusively for foreign export to its affiliated company, then your client is not required to hold a seller’s permit issued by the Board under the provisions of Sales and Use Tax Regulation 1699(b), since your client’s sales are not sales made in this state, but rather are exclusively for foreign export.

Your client should retain documentary evidence of its delivery of the property to the carrier, customs broker, or forwarding agent for export, as set out in subdivision (a)(3)(D) of Regulation 1620.

Source

• Annotated Legal Opinions collection: CDTFA Annotated Legal Opinions
• Live annotation: Annotation 410.0380
• Original supporting opinion: 410.0380 PDF

Original ruling text

410.0380

STATE OF CALIFORNIA

STATE BOARD OF EQUALIZATION
1020 N STREET, SACRAMENTO, CALIFORNIA
(P.O. BOX 942879, SACRAMENTO, CALIFORNIA 94279-0001)
(916) 445-6493

December 14, 1989
-Sales for resale and foreign exports
Dear ---:
In your September 29, 1989 letter to the Board, you write:
“One of our clients is purchasing agents for their affiliated company in the Far East. As such, they buy merchandise from various states in the United States for the sole purpose of exporting said goods to their affiliated company. “Of course, our clients need to be exempt from having to pay any sales tax when purchasing the goods or charging sales tax when exporting the goods, since the goods are strictly for export and not intended for their own use. “Please advise us whether our clients would be required to have a resale certificate (tax exemption) or any other kind of permit in order to be able to conduct the above business. “Please provide us with a written response to the above inquiry and to the extent such certificate may be required, provide us with all information and applications.” Opinion Although you state that your client is a purchasing agent for its affiliated company, your letter also appears to indicate that your client is purchasing goods for its own account for resale to the affiliated company. If your client were, in fact, a purchasing agent for the affiliated company, your client would not need to hold a seller’s permit, since it would not be making purchases and sales for its own account. Rather, the transactions to which sales or use tax could apply would be the transactions between the sellers and the affiliated company as the purchaser.

-2-

December 14, 1989
410.0380

If your client purchases goods for its own account exclusively for foreign export to its affiliated company, then your client is not required to hold a seller’s permit issued by the Board under the provisions of Sales and Use Tax Regulation 1699(b), since your client’s sales are not sales made in this state, but rather are exclusively for foreign export. Your client should issue to its vendors a resale certificate in the form set out in subdivision (b) of Regulation 1668. Please note that under subdivision (b)(1)(C) of that Regulation, in lieu of a seller’s permit number, your client may enter a notation on the resale certificate that it is not required to hold a seller’s permit because all of its sales are for export. Finally, your client should document that all of its sales are sales for export under the provisions of Regulation 1620(a)(3)(C). Your client should retain documentary evidence of its delivery of the property to the carrier, customs broker, or forwarding agent for export, as set out in subdivision (a)(3)(D) of Regulation 1620. I enclose Regulations 1620, 1668, and 1699 for your information. Please note that we cannot advise you whether there are any other permits (besides a seller’s permit) which your client may be required to obtain in order to conduct its business. Please feel free to contact me if you have any further questions or comments about this letter. Sincerely,

John Abbott
Senior Tax Counsel

JA:jb
Enclosures