Franchise Tax Board
California exempts sales of property to be delivered to out – of – states destination if under the sales contract the property is required to be and is actually shipped be the seller to an out –of –state destination by means of either (1) facilities operated by the seller or(2) delivery by seller to a carrier, customs broker, or forwarding agent ,whether hired by the purchaser or not, for shipping to the out-of – state destination.(sec,6396, rev.& Tax Code)See P 1505 for a discussion of interstate transactions exempt from use tax.
Government agency transactions
A statutory exemption applies to sales to
– The U.S government and its unincorporated agencies an instrumentalities;
– Any incorporated agency or instrumentality of the United States that is wholly owned by the United States or by a corporation wholly owned b the United States;
– The American National Red Cross; and
– Incorporated federal instrumentalities not wholly owned by the United States (unless federal law permits taxation of the instrumentality)
– (sec 6381, Rev. & Tax. Code; Sec. 6402, Rev. & Tax. Code)
– The use tax may not be imposed on the storage, use or the consumption of property by the government unless specifically allowed under federal law.(Reg. 12614,18 CCR) Sales to state or local governmental units are subject to the tax.