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Determining Sales tax for shipments from CA going all over US but billed to RI

My company is located in Orange County, CA. We sell equipment to a company that is based in Rhode Island. The customer has facilities in almost every state (including CA). The customer's billing address is RI but we ship the equipment all over the US. Are these sales all taxable? If so, what tax rate(s) should we charge for these transactions?


Sara Voight
Title: Controller
Company: Critical Signal Technologies, Inc
(Controller, Critical Signal Technologies, Inc) |

My experience is that I have to charge/collect/remit to the locations where the equipment is delivered. I am currently filing sales/use tax returns in 37 states. A huge pain in the 'rear' but each state counts nexus for items delivered within their borders.

(CFO) |

Don't confuse sales and use tax.

In this case, I can guarantee that RI wants their use tax. You apparently have insufficient nexus to be required to collect RI sales tax on the transaction.

And, CA is not entitled to a sales tax on this sale since the item is being sold for use out of state.

The test I always applied when looking at these situations as a starting point was FOB: Where was the title transfer actually taking place? That's where the purchase was considered to have been made.


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