AB 2716, as introduced, Wieckowski. Sales and use taxes: resale certificate.
Under the Sales and Use Tax Law, if a purchaser who gives a resale certificate or purchases property for the purpose of reselling it makes any storage or use of the property other than retention, demonstration, or display while holding it for sale in the regular course of business, the storage or use is taxable as of the time the property is first so stored or used.
This bill would make technical, nonsubstantive changes to that provision.
Vote: majority. Appropriation: no. Fiscal committee: no. State-mandated local program: no.
The people of the State of California do enact as follows:
Section 6244 of the Revenue and Taxation Code
2 is amended to read:
(a) If a purchaser who gives a resale certificate or
4purchases property for the purpose of reselling it makes any storage
5or use of the property other than retention, demonstration, or
6display while holding it for sale in the regular course of business,
P2 1the storage or use is taxable as of the time the property is firstbegin delete soend delete
2 stored or used.
3(b) Ifbegin delete suchend deletebegin insert theend insert use is limited to the loan of the property to
4customers as an accommodation while awaiting delivery of
5
property purchased or leased from the lender or while property is
6being repaired for customers by the lender, the measure of the tax
7is the fair rental value of the property for the duration of each loan
8begin delete soend delete made.
9(c) If the property is used frequently for purposes of
10demonstration or display while holding it for sale in the regular
11course of business and is used partly for other purposes, the
12measure of the tax is the fair rental value of the property for the
13period ofbegin delete suchend deletebegin insert theend insert other use or uses.
14(d) If the property is mobile transportation equipment as defined
15in Section 6023, and the use is limited to
leasing the equipment,
16the purchaser may elect to pay his use tax measured by the fair
17rental value, if the election is made on or before the due date of a
18return for the period in which the equipment is first leased. The
19election must be made by reporting tax measured by the fair rental
20value on the return for that period, or inbegin delete suchend delete other manner as the
21board may prescribe. Tax must thereafter be paid with the return
22for each reporting period, measured by the fair rental value,
23whether the equipment is within or without the state. The election
24may not be revoked with respect to the equipment as to which it
25is made.
26(e) As used in subdivision (d), the term “fair rental value” means
27the rentals required by the purchaser under the lease except where
28the board determines thatbegin delete suchend deletebegin insert
theend insert rentals are nominal. The term
29shall not include any reimbursement payments made by the lessee
30to the purchaser for such use tax.
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