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Business Taxes Law Guide—Revision 2024
Sales And Use Tax Court Decisions
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Beline Fashions, Inc. v. State Board of Equalization … (1976)
Tax Applies to Separately Stated Transportation Charges if Transportation Is Not from Retailer's Place of Business Directly to the Purchaser
Plaintiff sold women's apparel through "home fashion parties" where an agent of plaintiff solicited orders for merchandise. The parties were held at the homes of "hostesses" recruited by the agent. The hostesses received merchandise awards based on sales. A standard delivery charge was added to each order. The hostesses collected for the orders and delivered the merchandise to the individual purchasers. All orders from a single party were sent by plaintiff to the hostess of that party. Section 6011 of the Revenue and Taxation Code permits retailers to exclude from the taxable sales price separately stated charges for shipment from the retailer's place of business directly to the purchaser.
Plaintiff was assessed tax on the delivery charges on the basis that delivery was not directly to the purchaser as required by the statute. Plaintiff paid the tax and sued for refund, contending that delivery was directly to a place specified by the purchaser as required by the Board's Ruling No. 58, then in effect. The court of appeal affirmed the trial court in finding that the hostesses were paid representatives of plaintiff and that the shipments could not therefore be said to be deliveries directly to the purchaser within the meaning of the statute, nor directly to a place designated by the purchaser within the meaning of the Board's regulation. Beline Fashions, Inc. v. State Board of Equalization (1976) 56 Cal.App.3d 389.