Were charges for legally required private-conservatorship information packages taxable as the packages moved from printer to Judicial Council, courts, and conservatorships?

Plain-English summary

The Judicial Council arranged for information packages concerning private conservatorships. A printer supplied the packages to the Council, the Council distributed bulk copies through the Department of General Services to county superior courts, and the courts furnished packages to private conservatorships while collecting transfer fees or cost reimbursements.

The printer's sale to the Judicial Council was taxable. The next two steps were not: charges from the Council to the courts and from the courts to conservatorships were nontaxable government-service transactions.

The reason was that government agencies furnished the property as required by law. The cost reimbursements were not "bargained for" consideration, so those transfers were not sales under Revenue and Taxation Code § 6006. The letter also read Government Code § 1835's "information package" language to cover bulk copies furnished to the courts.

The official PDF includes a 1996 fax asking whether the 1992 conclusion was still the Board's view, but it contains no later response. This page therefore reports the July 8, 1992 letter and does not infer an answer to the 1996 question.

What this means for you

Government agencies and courts

A statutory document-distribution duty can be a government service even when recipients reimburse costs.

Printers

The commercial printer's upstream sale remained taxable; government-service treatment began with the agency's legally required distributions.

Accountants and tax professionals

Map each transfer separately and determine whether payment is commercial consideration or an authorized government cost recovery.

Common questions

Q: Was the printer's sale taxable?

A: Yes.

Q: Were the Judicial Council's charges to superior courts taxable?

A: No. They were government-service cost reimbursements.

Q: Were court charges to private conservatorships taxable?

A: No, for the same reason.

Q: Does the source confirm the rule remained unchanged in 1996?

A: No. It includes the question but no official response.

Citations and references

• California Revenue and Taxation Code § 6006
• California Government Code § 1835

Source

• Annotated Legal Opinions collection: CDTFA Annotated Legal Opinions
• Annotation page: Annotation 515.0002.850
• Original supporting opinion: 515.0002.850 PDF

Original ruling text

STATE OF CALIFORNIA 515.0002.850

STATE BOARD OF EQUALIZATION een pe M. BENNETT
irst District, Kentfield

1020 N STREET, SACRAMENTO, CALIFORNIA

(P.O. BOX 942879, SACRAMENTO, CALIFORNIA 94279-0001) BRAD SHERMAN

Second District, Los Angeles

(916) 446-3723 (8) 485-3723
ERNEST J. DRONENBURG, JR.
Third District, San Diego

July 8, 1992

MATTHEW K. FONG
Fourth District, Los Angeles

GRAY DAVIS
Controller, Sacramento

Mr. Ben McClinton
Attorney BURTON W. OLIVER
Judicial Council of California Peeeutve Dreceer
303 Second Street, South Tower

San Francisco, CA 94107

Dear Mr. McClinton,
This is in response to your facsimile transmission of July 7, 1992.

On July 7, we discussed by telephone application of the California Sales Tax Law to certain transactions involving “information packages" concerning private conservatorships.

You requested an immediate response. We can confirm our advice that sales tax applies to the sale made by the printer to the Judicial Council. Charges made by the Judicial Council, through the Department of General Services, to the Superior Courts of the individual counties are not subject to tax. Charges made by the individual Superior Courts to the private conservatorships are likewise nontaxable. Both the transaction involving the Judicial Council and the Superior Court, and the transaction involving the Superior Court and the private conservatorship are regarded as government service transactions, and not as sales, notwithstanding the fact that transfer fees in the nature of cost reimbursements are paid in both instances.

Revenue and Taxation Code section 6006 defines the term "sale" to mean and include "any transfer ... of tangible personal property for a consideration." Where property is furnished to members of the public by a governmental agency as required by law there is no “bargained for” consideration, and, therefore, there is no sale.

The term "information package" as used in Government Code section 1835 can be interpreted to cover the circumstances where the Judicial Council furnishes copies in bulk to the various Superior Courts.

Very truly yours,

Gary J. Jugum
Assistant Chief Counsel
GJJ:sr
Sent by facsimile transmission to (415) 396-9349

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