Laws, Regulations & Annotations

Business Taxes Law Guide – Revision 2011
 

Sales And Use Tax Law

CHAPTER 1. GENERAL PROVISIONS AND DEFINITIONS

Section 6009.1

6009.1. "Storage" and "use"; exclusion. "Storage" and "use" do not include the keeping, retaining or exercising any right or power over tangible personal property for the purpose of subsequently transporting it outside the state for use thereafter solely outside the state, or for the purpose of being processed, fabricated, or manufactured into, attached to or incorporated into, other tangible personal property to be transported outside the state and thereafter used solely outside the state.

History.—Added by Stats. 1943, p. 2569, operative July 1, 1943. Stats. 1953, p. 2460, in effect September 9, 1953, deleted "shipped or brought into this State" after "power over tangible personal property." Stats. 1965, p. 3004, in effect September 17, 1965, added the second paragraph. Stats. 1980, Ch. 546, operative January 1, 1980, deleted second paragraph.

Property installed in this state.—Use tax applies to automatic control equipment which is purchased outside this state, brought to this state, and permanently attached in this state to a locomotive which operates in interstate commerce partly in this state, even though the only actual functional use of the equipment occurs while the locomotive is running in another state. Atchison, Topeka and Santa Fe Railway Co. v. State Board of Equalization (1955) 131 Cal.App.2d 677.
Use tax applies to in-state installation of equipment previously tested and held at taxpayers out-of-state national base and scheduled to be substantially consumed in interstate commerce outside the state. American Airlines v. State Board of Equalization (1963) 216 Cal.App.2d 180.

1953 Amendment.—The 1953 amendment deleting the words "shipped or brought into the State" was a change rather than a clarification of previous law. Levine v. State Board of Equalization (1956) 142 Cal.App.2d 760. Containers for storage use only.Original cans filled and used in this state to store tomato paste until further processing in another state are not exempt from the sales and use tax as they are not purchased for resale and do not become an integral part of the finished product. H. J. Heinz Co. v. State Board of Equalization (1962) 209 Cal.App.2d 1.

Delivery of trucks.—Exclusion applies to trucks transported under their own power for out-of-state delivery. Board regulation requiring passive transportation abridged statutory exclusion. Stockton Kenworth, Inc. v. State Board of Equalization (1984) 157 Cal.App.3d 334.

Warehousing and assembling displays is functional purpose.—Where taxpayer first stored and then assembled promotional displays into prepacks, there was a functional purpose for the displays other than to move through the state for consumption elsewhere, and section 6009.1 does not preclude use tax on displays shipped out of state. Parfums- Corday, Inc. v. State Board of Equalization (1986) 187 Cal.App.3d 630.