Ezel / Tax Rulings / CA

Did printed-message exemption apply when the seller delivered publications to the purchaser's parking lot for same-day pickup by distributors?

Short answer No. Delivery to the purchaser defeated the exemption regardless of same-day redistribution; the seller needed to deliver to the distributor with common-carrier involvement.
State
CA
Ruling
Annotation 432.0068
Tax type
Sales and Use Tax
Issued
1992-04-15
Issued by
California State Board of Equalization
Requested by
A publisher receiving printed publications in its parking lot (identity redacted)
Topics
purchaser possession independent distributors common carrier printed sales messages
Source
View Original PDF

Apply this to your situation

This page answers the general question as of 1992. Ask about yours and see what current California tax law says, with citations.

Currency note: this ruling is from 1992
Subsequent statutory amendments, regulation changes, court decisions, or later rulings may have changed the analysis. Treat this page as historical context, not current tax advice. Verify current law before relying on any specific rule, rate, or position mentioned here.
Disclaimer: This is an April 15, 1992 California State Board of Equalization senior-tax-counsel opinion issued to a publisher and published by CDTFA as support for a sales and use tax annotation. The result turns on the seller's delivery to the purchaser before distributors took possession. A changed process still had to include direct distributor delivery and common-carrier involvement at some stage. This summary is informational only and is not legal or tax advice.
About this page: The plain-English summary, reader guidance, and Q&A below were written by Ezel based on the official state tax ruling. The original ruling (linked on this page as a PDF) is the authoritative source for any reliance.
View original ruling (PDF)

Plain-English summary

A publisher had sellers deliver printed sales messages to its parking lot. Two outside distributors then picked them up and distributed them, and the publisher explained that the materials had to reach third parties the same day.

California denied exemption because the seller delivered the publications to the purchaser rather than to the free third-party recipients. The business reason and rapid onward distribution did not change the purchaser-possession problem.

The opinion suggested a compliant structure could have the seller deliver directly to the publisher's distributor. Even then, a common carrier still had to participate at some point in the delivery chain.

What this means for you

Publishers, printers, distributors, and tax professionals

Avoid even brief delivery to the purchaser when the exemption requires direct third-party distribution. Operational urgency and same-day transfer do not erase purchaser possession.

Common questions

Q: Did same-day distributor pickup save the exemption?

A: No. The seller had already delivered the publications to the purchaser.

Q: Did the reason for using the parking lot matter?

A: No. The opinion said the delivery result controlled regardless of the reason.

Q: What procedure did the opinion suggest?

A: Have the seller deliver to the distributor instead of to the purchaser.

Q: Was distributor delivery alone enough?

A: No. A common carrier also had to be involved at some delivery stage.

Citations and references

  • California Revenue and Taxation Code § 6379.5

Source

Original ruling text

432.0068

STATE OF CALIFORNIA

STATE BOARD OF EQUALIZATION

MEMBER
First District

1020 N STREET, SACRAMENTO, CALIFORNIA
(P.O. BOX 942879, SACRAMENTO, CALIFORNIA 94279-0001)
(916) 445-6450

BRAD SHERMAN
Second District, Los Angeles
ERNEST J. DRONENBURG, JR.
Third District, San Diego
MATTHEW K. FONG
Fourth District, Los Angeles

April 15, 1992

GRAY DAVIS
Controller, Sacramento

BURTON W. OLIVER
Executive Director

Ms. S--- L--Publisher
S--- E---, Inc.
XXXX --- Road
--- ---, CA XXXXX
Dear Ms. L---:

This is in reply to your March 10, 1992 letter regarding our November 21, 1991 letter on the subject of the application of sales tax to sales of printed sales messages. You believe that the sale to you of the printed sales messages should be exempt notwithstanding that the seller delivers the publications to your parking lot. You sent letters from your two distributors, each of which stated that the distributor picks up the publications from your place of business and distributes the publications. You explained that the reason the publications are delivered to you is that they must be distributed the day they are delivered to you. Regardless of the reason that you have the publications delivered to you by the seller, since your seller does deliver them to you instead of to the third party donees who receive them at no cost, the seller’s sale does not qualify for exemption under Revenue and Taxation Code section 6379.5. If you were to change your procedures to have the seller deliver to your distributor, you must still have some involvement in some stage of the delivery by a common carrier. If you have further questions regarding this, feel free to write again. Very truly yours,

Ronald L. Dick
Senior Tax Counsel

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