This аction was commenced by the state to enforce the statutory liability of the West Publishing Company, a Minnesota corporation, for use taxes levied as the result of its sale of law books and legal periodicals to California customers during the period of July 1, 1935, to December 31, 1939, inclusive, pursuant to the California Use Tax Act of 1935, as amended. (Stats. 1935, ch. 361, p. 1297, as amended by Stats. 1937, chs. 401, 671, 683, pp. 1327, 1874, 1935, Stats. 1939, ch. 677, p. 2154; Deering’s Gen. Laws, 1937, Act 8495a;
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now Rev. & Tax. Code, div. 2, pt. 1.) After personal service of process had been made upon three of defendant’s salesmen opеrating in this state, defendant appeared specially in this action and moved to quash the service of summons on the ground that it was a foreign corporation engaged exclusively in interstate commerce and was not doing business in this state so as to be amenable to its process. Defendant also contested the constitutionality of the Use Tax Act as applied to its local activities, claiming that its subjection to the requirements of the tax would constitute a regulation of and a direct burden upon interstate commerce and would dеprive it of its property without due process of law. The motion to quash service of summons was denied, and this court thereafter denied defendant’s application for a writ of prohibition to restrain the trial court from proceeding further in the action.
(West Publishing Co.
v.
Superior. Court,
Appellant apparently concedes that in view of the recent decision of the Supreme Court of the United States in
General Trading Co.
v.
State Tax Com.
(1944),
In response to these contentions, respondent asserts: (1) the timeliness of the action as brought on the entire tax claim pursuant to the terms of the Use Tax Act; (2) the failure of appellant to avail itself of its administrative remedies as precluding its complaint here of alleged errors in the tax agency’s computation of the tax assessment; but in any event (3) the integrated local activity of appellant negatives its constitutional objections to its tax liability on mail order business with California customers; and (4) counterclaims have no place in an action to enforce the payment of taxes, unless expressly *83 so authorized by statute. Consideration of the legal principles applicable to the disposition of the matters in controversy leads to the conclusion that the judgment should be affirmed.
This appeal is presented upon an agreed statement. The nature of appellant’s activities in this state has been discussed at some length in prior opinions of this
court—West Publishing Co.
v.
Superior Court, supra,
Appellant is a Minnesota corporation, with its principal place of business in St. Paul, Minnesota. It is engaged in the business of publishing and selling law books and legal periodicals throughout the United States. It has not quаlified to do intrastate business in California. However, during the period here involved it maintained11 places of business ’ ’ in this state— space occupied in certain law offices located in Sacramento, San Francisco, and Los Angeles in return for the use of its books stored in such offices—and it had four regularly employed solicitors operating therefrom and devoting their entire time to appellant’s business. It advertised in local legal periodicals and newspapers its places of business where its local representatives could be contacted. Appellant’s employees in this state were authorized to and did solicit orders; accept down payments in connection with the orders taken, usually involving an installment arrangement; obtain and forward to appellant credit information concerning appellant’s present and prospective customers; collect delinquent accounts upon the request of appellant’s credit department; undertake adjustments in case of complaints by customers as to the condition of the books upon arrival, delivery service, or other matters; assist prospective purchasers in the disposal of second-hand books; and keep appellant advised concerning the current status of attorneys in this state. The books were sold by appellant under title-retaining contracts, appellant retaining title until full payment was made therefor. Orders obtained by appellant’s local salesmen were required to be sent to the home *84 office for approval or rejection, and in the latter event instructions were given to the salesmеn either to rewrite the contract or refuse it altogether. In addition to the orders obtained through the solicitation of its local salesmen, appellant also did a certain amount of business in response to mail orders forwarded directly to appellant’s home office by persons resident in this state. With respect to the source of appellant’s business in this state, the trial court found that “approximately 60% in amount of the orders received by [appellant] from California customers . . . resulted from solicitation by [its] employees” in this state (“approximately 35% . .'. from current solicitation . . . and approximately 25% . . . from prior solicitation”) and “approximately 40% . . . were mail orders” sent directly to appellant’s home office. Appellant filled all orders by direct shipment from its Minnesota publishing plant, via common carrier and with transportation charges prepaid to its customers in this state. Appellant also shipped books, without prior order, to California customers owning prior editions of the particular publication, and in the event of objection to such methоd of sales promotion, the matter would be referred to a local salesman for adjustment and disposition.
Appellant failed to file a return for use taxes for the period here involved, and the State Board of Equalization, under authority of section 10 of the Use Tax Act and upon such information as it had in its possession, made an estimate of $900,000 as the total amount of appellant’s sales of “tangible personal property” for “storage, use or other consumption in this state” (or $50,000 for each quarterly period). Written notice of thе estimate and computed tax liability was mailed to appellant on February 28, 1940; it made no application for a redetermination as authorized by section 12 of the act; and the amount so determined by the board to be due from appellant became final. The trial court made findings in accord with the board’s computation of appellant’s total tax liability upon the filing of suit—$36,922.50, consisting of $27,000 for use taxes, interest amounting to $4,522.50 as accrued to September 15,1940 (§ 8), and penalties in the sum of $5,400 (§§ 10,12)— but allowed a ‘ ‘ credit for payments of tax, interest аnd penalties subsequently made by [appellant’s] customers directly to the [board] ” on books purchased during the period involved. Accordingly, judgment was entered in favor of the state in “the sum of $36,668.39, together with interest on the sum of . . . $26,809.32 (the amount of delinquent use taxes as *85 reduced from $27,000 by reason of the credit) at the rate of . . . %% . . . per month, or fraction thereof, from September 15,1940, to date of judgment, together with interest on the whole of said judgment at the rate of . . . 7% . . . per annum from the date of judgment until paid,” plus costs.
In objection to such adjudication of its total tаx liability, appellant first argues that a portion of the state’s tax claim is barred by the statute of limitations. By the terms of the act, the use tax is payable quarterly, “on or before the fifteenth day of the month next succeeding each quarterly period” (§7), and an action may be brought by the board “[a]t any time within three years after any amount . . . required to be collected has become due and payable and any time within three years after the delinquency of any tax” (§24; emphasis added). This action was commenced on October 15,1940. Appellant maintains that the statutory рeriod of limitations began to run on its “liability for any quarterly period involved in this action, on the 16th day of the month following such period,” and accordingly the recovery of the use tax on sales made prior to October 15, 1937, is barred by the applicable section of the act itself above quoted, as well as by section 338, subdivision 1, of the Code of Civil Procedure, prescribing a like three-year period of limitation for the commencement of an action “upon a liability created by statute.”
But appellant’s argument gives no effect to other pertinent provisions of the Use Tax Act. As heretofore noted, this action was commenced to collect an amount determined by the board to be due from appellant under authority of section 10, upon the “failure” of a “person” subject to the terms of the act “to make a return” for the period in question. Section 12 provides that “[a] 11 amounts determined to be due by the board under the provisions of section 9 or 10 . . . shall become due and payable at the time they become final” (emphasis added), and that they become “final’ ’ 30 days after the service of the board’s notice оf determination if, as here, no petition for redetermination has been filed within such period. The board made its determination of appellant’s use tax delinquency for the period involved on February 28, 1940; “thirty days” thereafter the assessment became “final”; and any action to collect the amount which had then become “due and payable” pursuant to the board’s determination could be brought within three years under the express provisions of *86 section 24 above quoted. The present action was commenced within the year and therefоre well within the authorized period.
This conclusion as to the timeliness of respondent’s action finds support in the decisions reached in the cases of
People
v.
Hochwender,
Appellant next challenges the propriety of the judgment by reason of the (1) alleged erroneous inclusion of its mail order sales within the use tax computation and (2) failure to allow certain counterclaims in fixing its total liability. In opposition to the consideration of these objections, respondent properly cites the rule of the exhaustion of administrative remedies as here applicable. Thus, appellant, though subject to the provisions of the Use Tax Act and acсordingly required to file returns, nevertheless failed to so comply with the statute; it thereby became necessary for the board to determine appellant’s use tax liability on an estimated basis and so notify appellant (§10); and appellant made no “petition for a redetermination” but permitted the amount so determined by the board to become final (§ 12). Yet now appellant seeks a reduction in the amount of its use tax assessment for reasons which it neglected and refused to present to the administrative agency expressly empоwered to determine and dispose of disputed issues of liability in the granting of appropriate relief. Here appellant not only has failed to exhaust its administrative remedies, but it has neglected to make any use of the orderly procedure provided for securing a correct tax assessment before judicial redress is sought. Analogous considerations were before this court in
West Publishing Co.
v.
McCol
*88
gan, supra,
Appellant argues that since its objections to the use tax assessment only involve questions of law as distinguished from pure issues of fact, it was not required to present its contentions first to the board before asserting them in this litigation. But in the effective performance of its designated functions under the terms of the Use Tax Act, the board necessarily must pass upon matters of both law and fact, and though the “ [administrative determination of questions of law is subject to judicial review upon which the courts may substitute their own judgment for the administrative determination” (42 Am.Jur. § 210, p. 622; note 4, citing numerous cases), the board nevertheless should be afforded the opportunity to rectify any determination it has made and consider a revision of its tax assessment.
(Alexander
v.
State Personnel Board,
But aside from this procedural qualification affecting appellant’s initial presentation of its argument here, its first contention may not be sustained on the merits. Appellant
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makes the constitutional objection that its required collection of the use tax on mail order sales would impose a burden upon interstate commercе and violate the due process clause of the Fourteenth Amendment. In discussing this issue, there should be noted at the outset the two prior opinions of this court wherein appellant’s method of doing business in this state was fully reviewed in relation to asserted tax obligations:
West Publishing Co.
v.
Superior Court, supra,
There is no violation of the commerce clause involved in the requirement that an out-of-state seller of goods collect a use tax on goods sold for use within the state
(Nelson
v.
Sears, Roebuck & Co.
(1941),
Appellant argues that the rationale of these two cases would not apply here because there, contrary to the present situation, the company had qualified to do business within the state and so submitted to its jurisdiction. But such distinction was expressly rejected as a controlling factor in the later case of
General Trading Co.
v.
State Tax Com., supra,
Likewise foreign corporations, not licensed to do business in the state, have been held amenable to the requirement of use tax collection despite their contention that such subjection would amount to a denial of due process.
(Felt & Tarrant Mfg. Co.
v.
Gallagher, supra,
Nor does it avail appellant here to urge as its second contention in dispute of its adjudicated tax liability, that the trial court erred in “disallowing [its] counterclaims for $920.65 and $1,052.50, respectively.” While the foregoing discussion concerning appellant’s failure to exhaust its administrative remedies adequately disposes of this point of objection, a further observation relating to these alleged counterclaims should be made. Appellant seeks to offset against the assessment, which was based upon estimated sales of $900,000 for the tax period in question, the amount which it claims to be attributable to sales to state agencies for both that tax period and a later tax period, without making any showing at any stage of the proceedings that the amount of its actual sales, less the claimed sales to such agencies, was not far in excess of the estimate of $900,000. Under these circumstances, it appears peculiarly appropriate here to apply the rule requiring the taxpayer to exhaust administrative remedies before asking for judicial relief, and it becomes unnecessary to discuss the question of whether a counterclaim may ever be interposed in an action brought by the state for the purpose of enforcing a tax liability.
The judgment is affirmed.
Gibson, O. J., Shenk, J., Edmonds, J., Carter, J., Schauer, J., and Dooling, J. pro tern., concurred.