Laws, Regulations & Annotations
Business Taxes Law Guide – Revision 2013
Sales and Use Tax Annotations
295.0000 GROSS RECEIPTS
295.0747 Use Tax Is Due on Agreed Sales Price. An individual sold a vessel to a purchaser, as agent for a corporation, for an agreed sales price of $60,000. The purchaser seeks to reduce the agreed sales price as the measure of tax on the basis of allegations of fraud set forth in current litigation with the seller.
Once a sales price is agreed upon and a transaction completed based thereon, a dispute thereafter between seller and purchaser as to the price does not have any bearing on the use of the agreed price in computing the use tax, Southern California Edison Co. v. State Board of Equalization 7C 3d 652 (1972). The court stated, "An overall view of the sales and use tax statutory scheme, however, indicates that the Legislature intended the sales price and gross receipts terminology of sections 6011 and 6012 to refer to the price agreed upon at the initial sales transaction and not to the net amount which the buyer ultimately pays for the goods purchased." (emphasis is that of the court). Even if subsequently there is a settlement or adjudication concerning the vessel, it would not have the effect of reducing the initial agreed sales price on which the tax was predicated. 9/8/75.