Good Morning Michele –
A "sale" means any transfer of title or possession, exchange, or barter, conditional or otherwise, in any manner or by any means whatsoever, of tangible personal property for a consideration. [Sec. 6006(a), Rev. & Tax. Code]
California sales tax is imposed on every retailer for the privilege of making retail sales of tangible personal property in the state. [Sec. 6051, Rev. & Tax. Code]
A parent and its subsidiary/JV are treated as separate entities for sales tax purposes. Each entity is required to hold a permit and file their own sales and use tax returns. Accordingly, a transfer between related parties is treated the same as a transfer between unrelated parties when the sales price includes all the transferor's cost, including the cost of the property and any overhead expenses reasonably allocable to the cost and sale of that property.
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Brian Ebeling
Partner
Innovative Sales Tax Solutions, LLC
brian.ebeling@ist-solutions.com(610) 533-0724
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Original Message:
Sent: 03-18-2024 18:46
From: Michele McGrath
Subject: Sales tax on ready mix sales
We have a ready mix plant on site and regularly make our own ready mix concrete to supply our own jobs and to sell to outside customers.
We will be doing a job later this year where we will make ready mix concrete and will sell it to a joint venture that we are a minority partner in.
I assume we will have to charge sales tax on the sale to the JV since it is a third-party, but having a hard time finding specific tax law/code referencing this.
Can anyone assist?
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Michele McGrath, CPA
Controller
J. F. Shea Construction, Inc.
Walnut CA
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