Ezel / Tax Rulings / CA

Were automobile-insurance quote reports taxable when each report depended on a customer's drivers, vehicles, records, uses, and desired coverage?

Short answer The first truly custom report was a nontaxable service; separately charged extra copies were taxable unless the contract required mailing them out of state.
State
CA
Ruling
Annotation 515.0002
Tax type
Sales and Use Tax
Issued
1992-04-15
Issued by
California State Board of Equalization
Requested by
An automobile-insurance report business (identity redacted)
Topics
custom reports additional copies interstate delivery
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 a California State Board of Equalization Tax Counsel opinion dated April 15, 1992, published by CDTFA as support for a sales and use tax annotation. It assumes reports were not canned by geographic area and that each customer's rate quotes depended on detailed driver, vehicle, use, record, and coverage responses. Another reporting business should check current insurance-quote, custom-report, standardized-report, multiple-copy, digital-delivery, interstate-delivery, contract, and sales-tax rules. 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

An automobile-insurance report business collected each customer's contact and payment details plus the number of vehicles and drivers, each driver's age, occupation and driving record, each vehicle's type, age and use, and desired coverage.

California concluded that a first report was a nontaxable service if its rate quotes and other information truly depended on those customer-specific answers rather than being a canned report for a geographic area.

Separately charged extra copies were taxable. The exception stated in the opinion was for extra copies mailed to an out-of-state address pursuant to the contract of sale.

What this means for you

Insurance-information businesses

The source tied service treatment to genuine customer-specific inputs and analysis.

Accountants and tax professionals

Review whether reports are canned, what inputs change the result, how many copies are supplied, separate copy charges, contractual delivery duties, and destination.

Common questions

Q: Was the first customized report taxable?

A: No.

Q: What if reports were standardized by geographic area?

A: The opinion's nontaxable custom-report conclusion would not apply.

Q: Were extra copies taxable?

A: Yes, when separately charged.

Q: What if extra copies were mailed out of state?

A: The opinion excluded them when out-of-state mailing was required by the contract of sale.

Citations and references

  • The opinion states its conclusions without numbered statutory or regulatory citations

Source

Original ruling text

515.0002
(916) 324-8208

April 15, 1992

REDACTED TEXT
RE:

Application of Sales Tax to Automobile
Insurance Reports

Dear Ms. REDACTED TEXT:
This is in response to your follow up letter dated April 8, 1992, in which you provided us with further information concerning the automobile insurance reports your business will be printing. According to your letter, customers will be asked the following information when they request a report: 1. 2. 3. 4. 5. 6. 7. 8. 9.

Name
Address
Phone
Credit card name and number
Number of vehicles
Number of drivers
Each driver’s name, age, occupation, driving record
Each vehicle type/name, age, usage
Coverages desired

In addition, you enclosed with your letter a sample report. It appears that the reports will not be “canned” or standard reports for customers in a particular geographic area. Rather, the insurance rate quotes and other information given in a report will depend upon the customer’s responses to items 2 and 5 through 9 listed above. If this is the case, each report will be a custom product, and your charges will be for a nontaxable service. If, however, you provide extra copies of a report and charge the customer for the extra copies, you must report and pay sales tax on the extra copies unless you mail the extra copies to an out-of-state address.

515.0002

2

April 15, 1992

If you have further questions regarding sales and use tax law, please do not hesitate to write again. Sincerely,

Elizabeth Abreu
Tax Counsel
EA:cl
cc: REDACTED TEXT District Administrator

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