Sales factor; sales of tangible personal property in this State

# (a)

Gross receipts from sales of tangible personal property (except sales to the United States Government; see section 18-235-36-02) are in this State: (1) If the property is delivered or shipped to a purchaser within this State regardless of the f.o.b. point or other conditions of sale; or (2) If the property is shipped from an office, store, warehouse, factory, or other place of storage in this State and the taxpayer is not taxable in the state of the purchaser.

# (b)

Property shall be deemed to be delivered or shipped to a purchaser within this State if the recipient is located in this State, even though the property is ordered from outside this State. Example: The taxpayer, with inventory in State A, sold $100,000 of its products to a purchaser having branch stores in several states, including this State. The order for the purchase was placed by the purchaser’s central purchasing department located in State B. $25,000 of the purchase order was shipped directly to purchaser’s branch store in this State. The branch store in this State is the purchaser within this State with respect to $25,000 of the taxpayer’s sales.

# (c)

Property is delivered or shipped to a purchaser within this State if the shipment terminates in this State, even though the property is subsequently transferred by the purchaser to another state. Example: The taxpayer makes a sale to a purchaser who maintains a central warehouse in this State at which all merchandise purchases are received. The purchaser reships the goods to its branch stores in other states for sale. All of the taxpayer’s products shipped to the purchaser’s warehouse in this State constitute property delivered or shipped to a purchaser within this State.

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