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Our customer has location in TX, bill-to in MA and wants item shipped to freight forwarder in CA - for export to Mexico. Do we collect CA sales tax?

Full Question: We have a customer who has a branch location in Texas, their bill to location is Massachusetts, and they have requested a shipment to a freight forwarder of their choice in California, for export to Mexico. We are registered to collect sales tax in all 3 states mentioned. If the customer does not have a resale certificate in California, are we required to charge CA sales tax on shipments to their freight forwarder?

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Answer:

Diane Yetter photoYou are not required to charge California sales tax on shipments to a freight forwarder in California. The sale did not occur in California, and the purchaser does not take possession of the property in California. The shipment to the freight forwarder is a continuation of the interstate journey of the property sold, and is therefore exempt from California sales tax. You should ensure that the ship to address includes the name of the freight forwarder as the Ship to.

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