Laws, Regulations & Annotations
Business Taxes Law Guide – Revision 2015
Sales And Use Tax Law
CHAPTER 4. EXEMPTIONS
Article 1. General Exemptions
6357.5. Fuel and petroleum products sold to air common carriers. (a) There are exempted from the taxes imposed by this part the gross receipts from the sale of, and the storage, use, or other consumption of, fuel and petroleum products sold to an air common carrier for immediate consumption or shipment in the conduct of its business as an air common carrier, on an international flight.
(b) To qualify for the exemption, the air common carrier shall furnish to the seller an exemption certificate in writing stating the quantity of fuel and petroleum products claimed as exempt. That certificate shall bear the purchaser's valid seller's permit number or valid fuel exemption registration number and shall be substantially in the form prescribed by the board. Acceptance in good faith of that certificate shall relieve the seller from liability for the sales tax.
(c) "Immediate consumption or shipment," as used in this section, means that the delivery of the fuel and petroleum products by the seller is directly into an aircraft for consumption or transportation outside the United States and not for storage by the purchaser or any third party.
(d) "International flight," as used in this section, is a flight whose final destination is a point outside of the United States.
(e) Any air common carrier claiming exemption under this section who is not required to hold a valid seller's permit, shall be required to register with the board and obtain a fuel exemption registration number, and shall be required to file returns as the board may prescribe, either if the board notifies the carrier that returns must be filed or if the carrier is liable for taxes based upon consumption or transportation of fuel or petroleum products erroneously claimed as exempt under this section. A common carrier required to hold a fuel exemption registration number shall be subject to all applicable provisions of this part, Part 1.5 (commencing with Section 7200), and Part 1.6 (commencing with Section 7251).
(f) An air common carrier claiming an exemption under this section upon request, shall make available to the board records, including, but not limited to, a copy of a log abstract, an air waybill, or a cargo manifest, documenting its consumption or transportation of the fuel or petroleum products on an international flight and the amount claimed as exempt. If the carrier fails to provide these records upon request, the board may revoke the carrier's fuel exemption registration number.
(g) The board may require any air common carrier claiming an exemption under this section and required to obtain a fuel exemption registration number, to place with it such security as the board may determine pursuant to Section 6701.
(h) Pursuant to this section, any use of the fuel and petroleum products by the purchasing carrier, other than that incident to the delivery of the fuel and petroleum products to the carrier and the consumption or transportation of the fuel and petroleum products by the carrier on an international flight for use in the conduct of its business as a common carrier, or a failure of the carrier to document its consumption or transportation of the fuel and petroleum products on an international flight, shall subject the carrier to liability for payment of sales tax as if it were a retailer making a retail sale of the property at the time of that use or failure, and the sales price of the property to it shall be deemed to be the gross receipts from the retail sale.
(i) In the event that the federal exemption provided in Section 1309 of Title 19 of the United States Code, relating to supplies for certain vessels and aircraft, is repealed, this section is repealed as of that date.
History.—Added by Stats. 1988, Ch. 1227, in effect September 23, 1988. Stats. 1991, Ch. 1091, in effect January 1, 1991, substituted "January 1, 1994" for "that date" after "which is chaptered before" in the first sentence and added "However," to the second sentence. Stats. 1992, Ch. 905, in effect September 25, 1992, operative January 1, 1993, substituted "an international flight" for "a flight whose first destination is a foreign destination" in subdivision (a); deleted former subdivision (c) which defined "Foreign destination"; relettered former subdivision (d) as subdivision (c); added subdivision (d); substituted "on an international flight" for "to a foreign destination" in subdivision (f) and for "to the foreign destination" twice in subdivision (h); deleted the former first and second sentences which provided operative and repeal dates, substituted "In" for "However, in" before "the event", deleted "prior to January 1, 1994" after "is repealed", deleted "also" after "this section is", and substituted "that" for "the", in subdivision (i).