Legal Question in Business Law in California

You should ask the Board of Equalization. I think they would tell you that in the situation described, the tax is owed by the purchaser because it is styled as a use tax as well as a sales tax, and if you use the item you owe the tax. However, I think it is also true that the out-of-state retailer is under no compulsion to ask what state you're going to use the item in, and thus has no duty to collect. That's just my impression, and the BOE is your proper source for a reliable answer.

Under that definition of "Drop Shipment" it seems pretty clear that customer pick-up would be subject to the tax. Delivery does not require a common carrier or transit of the goods, under sale of goods law. A purchase "FOB Seller's Loading Dock" for example, means the goods are "delivered" to the edge of the seller's loading dock for the buyer to arrange shipment to the final destination. So "delivery" has it's more broad meaning of transferring possession of the goods in that case, and I believe the same is true here.