Either the sales tax or the use tax applies
with respect to all sales or purchases of tangible personal property except:
1. Sales or purchases of tangible personal property for the purpose of
resale, either in the form in which sold or as an ingredient or component part
of other tangible personal property. In order to document sales for resale, the
seller must secure from the purchaser a resale certificate bearing the
purchaser's seller's permit number or have other evidence to show that the
sale or purchase was in fact for resale. Sales by manufacturers, jobbers and
wholesalers to purchasers for use or consumption are retail sales and not
sales for resale.
Every person purchasing tangible personal property for resale who uses it
for purposes other than demonstration and display is subject to tax as of the
time of first use measured by the sales price of the property to him. If the use
is limited to the loan of the property to customers while awaiting delivery of
property purchased or leased from the lender or while property is being
repaired by the lender or if the property is used frequently for purposes of
demonstration or display and partly for other purposes, the measure of tax is
the fair rental value.
2. Sales or purchases of the following tangible personal property, covered
by specific exemptions.
(a) Property the sale or use of which the state is prohibited from taxing
under the Constitution or laws of the United States or the Constitution of this
state (Sec. 6352).
(b) Gas, electricity, and water delivered through mains, lines or pipes,
liquid petroleum gas for qualified residential and agricultural purposes, bulk
household water delivered in areas without water mains, lines or pipes, and
exhaust steam, waste steam, heat, or resultant energy produced in connection
with cogeneration technology (Sec. 6353).
(c) "California Gold" medallions produced and sold in accordance with
the Government Code (Sec. 6354).
(d) Bulk, monetized and nonmonetized bullion and numismatic coins
substantially equivalent to transactions in securities or commodities through
national securities or commodities exchanges (Sec. 6355).
(e) Motor vehicle fuel (Sec. 6357.7) and motor vehicle fuel used in propelling aircraft, except aircraft jet fuel,
the distributions of which in this state are subject to the tax imposed by Part
2 of this division and not subject to refund (Sec. 6357).
(f) Drugs and medicines, including oxygen, which are primarily used for
the prevention or control of disease that are administered to animal life of a
kind the products of which ordinarily constitute food for human consumption
(g) Animal life and feed therefor, including medicated feed and drinking
water, seeds, plants, and fertilizer, the products of which are to be used as
food for human consumption or sold (Sec. 6358 and 6358.4).
(h) Certain organic products and waste products used for fuel
(i) Wood shavings, sawdust, rice hulls, or other products that are used in
poultry and egg production and used as fertilizer products (6358.2).
(j) Food products for human consumption (6359).
This exemption does not include certain beverages, medicines, or dietary
supplements or adjuncts.
This exemption does not include food sold or consumed under the
following circumstances: when sold as a meal provided by a retailer; when
consumed at tables, chairs, counters or from utensils provided by the retailer;
when usually consumed at parking facilities provided for this purpose even
though sold on a "to go" basis; when consumed within a place which charges
admission (except national and state parks, monuments and marinas); when
sold as hot prepared products; when sold in a form suitable for on-site
consumption and the "80-80 rule" applies (Sec. 6359).
Otherwise exempt sales of food products are taxable when made through
a vending machine. A vending machine operator is the consumer of food
sold through a vending machine for 15¢ or less. A vending machine operator
is also the consumer of food (other than beverages and hot prepared foods),
dispensed in bulk from a coin operated machine for 25¢ or less (Sec. 6359.4).
Hot prepared food sold to air carriers engaged in interstate or foreign
commerce for consumption by their passengers. This exemption also applies
when the hot prepared food is sold to the passengers by the air carrier (Sec.
(k) Hot prepared food products sold to air carriers engaged in interstate
or foreign commerce for consumption by carried passengers. This exemption
also applies when the hot prepared food is sold to the passengers by the air
carrier (Sec. 6359.1).
(l) Ice or dry ice used for packing and shipping or transporting food
products for human consumption (Sec. 6359.7).
(m) Carbon dioxide and any nonreturnable containers containing carbon
dioxide used in packing or shipping fruits or vegetables under specified
(n) Newspapers and periodicals published or purchased by an Internal
Revenue Code 501(c)(3) organization if the publication is distributed to the
organization's members or contributors in consideration of the fee or
contribution. The exemption also applies if the 501(c)(3) organization's
publication contains no commercial advertising irrespective of the method of
distribution (Sec. 6362.8).
Newspapers or periodicals distributed by a non-profit organization if
distribution is to the organization's members in consideration of the fees and
if the cost of printing is less than 10 percent of the membership fee
attributable to the period for which the publication is distributed (Sec.
Sales of periodicals sold by subscription and delivered by mail or common
carrier (Sec. 6362.7).
Newspapers and periodicals distributed without charge (Sec. 6362.7).
(o) Meals and food furnished to students by their school or by certain
organizations and individuals. This exemption does not apply to food sold
within a place which charges admission (except national and state parks and
monuments) (Sec. 6363).
(p) Meals and food furnished or served to a gathering by certain religious
organizations if the revenue is used to carry out the organization's functions
and activities (Sec. 6363.5).
(q) Used clothing, household items, or other retail items sold by thrift
stores operated by a nonprofit organization if the purpose of that thrift store
is to obtain revenue for the funding of medical and social services to
individuals with HIV or AIDS (Sec. 6363.3).
(r) Meals delivered to homebound elderly or disabled persons by a
nonprofit volunteer home delivery meal provider (Sec. 6363.7).
(s) Containers under certain conditions (Sec. 6364 and 6364.5).
(t) Aircraft sold, leased or sold for, leasing for use as a common carrier or
for use outside this state. This exemption includes property sold to an aircraft
manufacturer and incorporated into aircraft to be leased by it under these conditions and property becoming a component part of the aircraft in the
course of maintenance, repair, overhaul or improvement of that aircraft (Sec.
(u) Certain property purchased by the San Diego Aero-Space Museum
and the California Science Center (Sec. 6366.4).
(v) Property the sale of which is an occasional sale. This exemption
includes sales by a person who is not required to hold a sellers permit. It also
includes the transfer of all property held by a business entity when there is
no change in ownership as a result of the transfer. It also includes certain
sales by producers of hay (Secs. 6367 and 6006.5). This exemption is not
applicable to sales of vehicles, vessels, and aircraft.
(w) Certain watercraft and component parts of such watercraft for use in
transportation for hire in interstate or foreign commerce or for use in certain
deep sea fishing operations (Secs. 6368 and 6368.1).
(x) Rail freight cars for use in interstate or foreign commerce (Sec.
(y) Passenger transportation vehicles sold or leased to the Department of
Transportation (Sec. 6368.7).
(z) Purchases of passenger transportation equipment by certain agencies, such as transit authorities at the end of the term of a specified lease or sublease (Sec. 6368.9).
(aa) Certain medicines for human use (Sec. 6369).
(bb) Property the gross receipts of which are received in the form of food
stamp coupons (Sec. 6373).
(cc) Property purchased or leased under certain fixed price contracts are
exempt from certain tax increases (Sec. 6376.1).
(dd) The sale and purchase of racehorse breeding stock (Sec. 6358.5).
(ee) Certain property purchased by businesses primarily engaged in
teleproduction and post production activities (6378).
(ff) Printed sales messages if they are printed to the special order of the
purchaser and delivered by a common carrier to a third party at no cost to
the recipient (Sec. 6379.5).
(gg) Mailing lists when the contract restricts the purchaser to a single use
of the mailing list (6379.8).
(hh) Space flight property purchased for use in any space flight (6380).
(ii) Property sold to the United States and to any incorporated or
unincorporated agency or instrumentality of the United States, and property
sold to the American National Red Cross (Sec. 6381—sales tax only).
(jj) Certain leases of property to the United States and instrumentalities
of the United States (Sec. 6381.5).
(kk) Certain property sold to a common carrier if it is shipped by the
purchaser's facilities to an out-of-state destination for use by the purchaser
in the conduct of its business (Sec. 6385).
(ll) Property sold to the holder of a seller's permit for use in performing a
contract to improve real property located outside this state and which is
incorporated into and becomes a part of such real property (Sec. 6386).
(mm) Property purchased solely for use outside this state and delivered
to a forwarding agent or export packer and actually delivered to a port
outside the United States prior to making any use thereof (Sec. 6387).
(nn) Certain new or remanufactured vehicles purchased from an out-ofstate
dealer for use outside this state or for use in interstate commerce but
delivered to the purchasers in this state under certain conditions (Secs. 6388
(oo) Motor vehicles sold by persons other than dealers, manufacturers,
remanufacturers, dismantlers, and lessor-retailers, and vessels and aircraft
sold by persons who are not required to hold a seller's permit are exempt
from sales tax but use tax may be payable by the consumer (Secs. 6282 and
(pp) Property on which the sales tax has already been paid (Sec. 6401—
exemption from use tax only—does not apply to leases).
(qq) Property purchased from any unincorporated agency or
instrumentality of the United States except "surplus" property (Sec. 6402—
use tax only).
(rr) Property loaned by a retailer to a school district for an education
program and the loan of motor vehicles to certain named institutions for
driver training programs (Sec. 6404).
(ss) Rentals required to be included in the measure of use tax or when
the property is outside this state (Sec. 6390).
(tt) Leases under which the lessor or lessee is obligated to lease the
property for an amount fixed by the lease prior to August 1, 1965 (Secs.
6391 and 6407).
(uu) Property becoming a component part of any railroad equipment in
the course of repairing, cleaning, altering, or improving that equipment
outside this state (Sec. 6411—use tax only).
(vv) Nonprofit, charitable, or education organizations which are vending
machine operators are considered consumers of the property sold through
vending machines for fifteen cents or less (Sec. 6359.45(a)). Public libraries
are consumers of photocopies sold through a coin-operated on-site copy
machine (Sec. 6359.45(b)).
(ww) Meals furnished to residents or patients of certain health and
community care facilities or of certain residential facilities serving persons
62 years of age or older, or of certain alcohol and drug abuse treatment
facilities (Sec. 6363.6).
(xx) Meals and food furnished at or below cost to low-income elderly
persons by nonprofit organizations and governmental agencies (Sec. 6374).
(yy) Meals and food products served on a regular basis to certain elderly
residents of condominiums (Sec. 6376.5).
(zz) Certain charitable organizations are considered consumers of
bracelets designed to commemorate American prisoners of war which are
distributed under certain circumstances (Sec. 6360).
(aaa) Hemodialysis products which constitute medicines and which are
supplied to a patient on order of a licensed physician and surgeon pursuant
to Section 4050.7 or 4227 of the Business and Professions Code (Sec.
(bbb) Certain nonprofit youth organizations are consumers of food
products, nonalcoholic beverages or other tangible personal property made
or produced by their members which they sell on an irregular basis for the
benefit of the organization (Sec. 6361).
(ccc) Certain nonprofit organizations are consumers of certain handcrafted
items designed or made by individuals with certain disabilities (Sec.
(ddd) Sales of items at an auction conducted by, or affiliated with, a
nonprofit organization when the proceeds are used for purposes of funding
homeless shelters, under certain conditions (6363.2).
(eee) Yearbooks and catalogs prepared for or by public or private schools,
school districts, or student organizations, and distributed to students
(fff) The sale or use of master tapes or master records embodying sound
(ggg) Prescription wheelchairs, crutches, canes, quad canes, and walkers
(hhh) Original visual works of art purchased by qualifying governmental
entities and nonprofit organizations to become part of a permanent collection
of certain museums and public places, or leased from one nonprofit
organization to another nonprofit organization for 35 years or more, or leased
by the state or any local government from another governmental entity for
display in public places (Sec. 6365).
(iii) New motor vehicles sold to residents of foreign countries who
arrange for the purchase through an authorized foreign vehicle dealer under
certain circumstances (Sec. 6366.2).
(jjj) Museum pieces purchased by qualifying organizations to replace
property destroyed by fire, flood, earthquake or other calamity within three
years from date calamity occurred (Sec. 6366.3).
(kkk) Endangered and threatened animal and plant species if both the
seller and purchaser are nonprofit zoological societies (Sec. 6366.5).
(lll) Items and materials used to modify a vehicle for physically
handicapped persons (Sec. 6369.4).
(mmm) Certain parent-teacher and nonprofit library associations and
organizations are considered consumers of tangible personal property sold
by them if the profits are used in furtherance of the purposes of the
organization (Sec. 6370).
(nnn) Medical identification tags sold by qualifying organizations
(ooo) Medical health information purchased by qualifying organizations
(ppp) Health and safety educational materials and insignia sold in
connection with health and safety and first aid classes by qualifying
organizations (Sec. 6409).
(qqq) The use of trailers moved under a one-trip permit (Sec. 6410—
exemption from use tax).
(rrr) The sale and use of certain used mobilehomes which are subject to
property tax or floating homes (Sec. 6379).
(sss) Certain medical oxygen systems (Sec. 6369.5).
(ttt) Certain nonprofit associations performing auxiliary services to city
and county museums are consumers of tangible personal property they sell
at annual rummage sales (Sec. 6370.5).
(uuu) New children's clothing sold to specified nonprofit organizations
that furnish the clothing under specified conditions (Sec. 6375.5).
(vvv) The sale of "Buddy Poppies" and similar impermanent lapel pins
that memorialize U.S. military veterans killed in foreign wars of the U.S.
(www) The sale and purchase of meals and food products for human
consumption furnished or served by any nonprofit veterans' organization at a
social or other gathering conducted by it or under its auspices for fundraising
purposes (Sec. 6363.8).
(xxx) The sale and purchase of farm equipment and machinery, and parts
thereof, when purchased by qualified persons engaged in the business of
farming or by other qualified persons who assist such persons (Sec. 6356.5).
(yyy) The sale and purchase of equipment and machinery designed
primarily for off-road use in commercial timber harvesting operations, and
the parts thereof, that is purchased for use by a qualified person engaged in
commercial timber harvesting (Sec. 6356.6).
(zzz) The sale and purchase of diesel fuel used in transporting farm
products to the marketplace and used in food processing operations
A purchaser who certifies in writing to a seller that property purchased
will be used for a purpose entitling the seller to regard the sale as exempt
and who uses the property for some other purpose must pay a tax to the state
measured by the purchase price of the property. The certificate shall relieve
the seller from liability for the sales tax only if it is taken in good faith.