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Business Taxes Law Guide—Revision 2024
Sales and Use Tax Annotations
A B C D E F G H I J L M N O P R S T U V W X
S
495.0000 Sale
Annotation 495.0849
(e) Retail Sale or Sale for Resale—Delivery by Owner, Former Owner, Factor or Agent
495.0849 Drop Shipment—Out-of-State Suppliers. A firm that is not engaged in business in California under section 6203 makes sales through the World Wide Web. It acquires the goods it sells from two out-of-state suppliers who drop ship the orders directly to the firm's California purchasers. One of these out-of-state suppliers is engaged in business in California under section 6203 while the other is not. The out-of-state supplier who is engaged in business in California is deemed the retailer under section 6007 and is required to collect use tax from the consumers measured by the price paid by the consumers to the firm. With respect to the property delivered by the out-of-state supplier who is not engaged in business in California, since neither the firm nor the supplier is engaged in business in California, the consumers must self-report their use tax liability. 6/18/97.