Laws, Regulations & Annotations

Business Taxes Law Guide – Revision 2018

Sales and Use Tax Annotations

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105.0000 AIRCRAFT—Regulation 1593

Annotation 105.0087

105.0087 Delivery to Nonresident. A California resident solicited donations from the public to pay for a helicopter which was to be used in a national park in Africa. The California resident agreed to purchase a helicopter from a California manufacturer F.O.B. Paloma, California. After delivery in California, the aircraft was shipped to Africa.

Section 6366 does not discuss whether the property is "sold to" the person receiving title from the seller or the person providing consideration for the contract. Consequently, the aircraft is "sold to" the person who will exercise a right or power over the aircraft.

If the obvious intention of the purchaser and seller was that the aircraft be delivered by a seller to a representative of the African country and if this intent was effectively carried out, title passed from the seller directly to the African country, notwithstanding that a California resident was required to pay seller for the aircraft. Under these circumstances, the sale would be exempt under section 6366.

On the other hand, if the California resident received the title or possession in lieu of title, the transaction would not be exempt under section 6366, notwithstanding the fact that the California resident subsequently gave the aircraft to the African country very shortly thereafter. 10/28/75.