Laws, Regulations & Annotations

Business Taxes Law Guide – Revision 2013
 

Sales and Use Tax Annotations


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L

330.0000 LEASES OF TANGIBLE PERSONAL PROPERTY—IN GENERAL—Regulation 1660

Annotation 330.1870

(a) IN GENERAL

330.1870 An Amount Fixed by the Lease. An amount fixed by the lease for purposes of an exemption from a tax rate increase or an exemption from a new tax means that the total amount due under the lease, including the amount of use tax due on the rental payment, is specifically fixed. A provision in the lease agreement providing that the amount itemized for tax is "estimated," or a provision in the lease agreement that provides that the lessee will pay to the lessor the applicable tax, means that the payment due from the lessee is not for an amount fixed by the lease and the lease would therefore not qualify for the exemption. Since the tax rate applicable to a lease is the rate in effect at time of use, a provision for the lessee to pay the lessor applicable taxes shows that the parties have contemplated that the rate may change and have provided for the lessee to pay to the lessor the tax applicable at the time of use. 12/2/91.