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Business Taxes Law Guide—Revision 2024

Sales and Use Tax Annotations


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I


305.0000 Indians

Annotation 305.0028.900


305.0028.900 Sale of Gaming Machines to Indian Organization. A California taxpayer has a contract with an Indian organization with gaming machines and pedestals. The contract provides that the items purchased are to be delivered "F.O.B. destination to the reservation and that upon delivery and installation of the goods to the Indian organization, title and risk of loss damage or seizure shall pass" to the Indian organization. The contract is silent as to whether delivery is made by facilities of the taxpayer or by common carrier.

Since the contract provides F.O.B. place of destination, the retailer completes its performance with reference to the physical delivery of the property on tender to the purchaser there. Therefore, even though delivery is made by common carrier (such as U.P.S.), the title or ownership of the property is transferred on the reservation. Thus, the requirements for the exemption under Regulation 1616(d)(4) are met and the sale is not subject to sales tax. 6/24/97.