Sales to Residents of Other Countries (Publication 104)

In general, the sale of merchandise to a resident of another country is taxable if the buyer takes possession of the item in this state—even temporarily—or uses the item before it is shipped abroad. However, some sales to foreign residents qualify as exports and are not subject to California sales or use tax. If you sell an item that will be shipped abroad before use and you ship it directly to a foreign destination or to a qualified person who will export the item, your sale may not be taxable. Please note: Foreign travelers cannot obtain refunds of sales tax paid on California purchases.

The table below can help you determine how tax applies when you sell an item to a foreign resident. Be sure to read the conditions and notes and to refer to the definitions and other information found on the reverse.

Circumstance of sale or delivery Is sale taxable? Conditions and notes
1. Buyer or buyer’s representative takes possession or control of item in California before it is transported out of the country. Usually

See items 4 and 5		 Tax applies even if the buyer later returns the item to you for shipment abroad or takes the item to a foreign country.
2. Item is used after ownership transfers to buyer but before item is shipped abroad. Yes Tax applies whether item is used by buyer, buyer’s representative, or seller.
3. Retailer delivers item directly to foreign country using retailer’s own vehicle. No See documentation requirements that may apply (see Required Documentation).
4. Retailer delivers item to a carrier, forwarding agent, export packer, customs broker, or other qualifying person for shipment to a foreign country (see Definitions). No Receiving business must regularly prepare items for export (see Definitions). Receiving business can be related to the purchaser’s business.
5. Retailer delivers item to the purchaser’s own ship, airplane, or other conveyance that will transport the item on a continuous journey to a foreign country.NoTransportation method and nature of item shipped must provide certainty that item is headed for a foreign country and will not be diverted for use in California. Special documentation requirements apply (see Required Documentation).
6. Retailer delivers item to a scheduled commercial carrier hired by the purchaser to transport the property to a foreign country. No See box above.

Please note: This publication summarizes the law and applicable regulations in effect when the publication was written, as noted above. However, changes in the law or in regulations may have occurred since that time. If there is a conflict between the text in this publication and the law, the decision will be based on the law and not on this publication.

Revision September 2018