Were off-highway trucks taxable when an Illinois seller delivered them in California and the buyer transported them to Oregon for all actual use?

Plain-English summary

A buyer purchased four off-highway trucks from an Illinois seller for use entirely at an Oregon jobsite. The trucks would be shipped from Illinois to Hilt, California, where the buyer would take delivery and transport them to Oregon.

California found no sales tax on the stated facts because no California office or branch of the seller participated in the transaction. It also found no use tax because section 6009.1 excluded the buyer's California keeping, retention, and transportation when the trucks were acquired for use entirely outside the state.

Common questions

Did taking delivery in California automatically create sales tax?

Not here. The letter relied on the representation that no California seller office or branch participated in the sale.

Did moving the trucks from Hilt to Oregon count as taxable California use?

No. Under the stated facts, that possession and transportation were only steps toward sole use outside California.

Citations and references

• Cal. Rev. & Tax. Code § 6009.1 — historical exclusion for keeping, retaining, or transporting property in California for subsequent sole use outside the state

Source

• Annotated Legal Opinions collection: https://cdtfa.ca.gov/taxes-and-fees/annotations-menu.htm
• Annotation page: https://cdtfa.ca.gov/lawguides/vol2/suta/570-0000-all.html
• Original supporting opinion: https://cdtfa.ca.gov/lawguides/annotations/570-1200.pdf

Original ruling text

570.1200

STATE OF CALIFORNIA

STATE BOARD OF EQUALIZATION

April 13, 1964

“H”
Gentlemen:
It appears from your letter of April 9 that you have purchased four off-highway trucks for use entirely in Oregon. The seller is “I” of Illinois. The trucks will be shipped to you form Illinois, and you will take delivery at Hilt, California. From this point you will transport the trucks to the jobsite near Ashland, Oregon. We understand from the telephone conversation between us on April 9 that you did not place the order for the trucks through any California office or branch of “I”, and that no California office or branch of that firm participated in the sale. This, if true, prevents the sales tax from applying which would ordinarily apply if property were delivered to the buyer in California in a transaction participated in by a California branch or office of the seller. The use tax does not apply under the stated facts inasmuch as the use for which the trucks were acquired will take place entirely outside this state, and the keeping, retention, and transportation of the trucks in this state is under the described circumstances excluded from the definition of storage and use by Section 6009.1 of the Sales and Use Tax Law. Very truly yours,

E. H. Stetson
Tax Counsel

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