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Delivery of goods by private vehicles protected P.L. 86-272 activity


The FTB has announced that out-of-state taxpayers that deliver items of tangible personal property (TPP) to California customers via a private delivery truck do not lose their immunity from California franchise or income taxes.1 Protected delivery activities are not limited to deliveries made by a common carrier.

P.L. 86-272 is a federal law that provides immunity to out-of-state sellers from a state’s income tax if the out-of-state seller’s only connection to the state is the sale or solicitation of orders of TPP. Delivery of the items falls within the P.L. 86-272 protections.

Note: While out-of-state sellers of TPP to California customers are protected from the California franchise and income taxes, they are not protected from the California minimum franchise or annual tax because these taxes are not based on income.

1 FTB Technical Advice Memorandum 2018-03