Laws, Regulations & Annotations
Business Taxes Law Guide – Revision 2017
Sales and Use Tax Annotations
330.0000 LEASES OF TANGIBLE PERSONAL PROPERTY—IN GENERAL—Regulation 1660
(a) IN GENERAL
330.2877 Sublease Out of State. A prime lessor, who is a manufacturer, leases computer equipment to a California firm and charges use tax on the rentals. The California firm subleases the property to an Arizona firm and claims a tax paid purchase resold deduction. Since the California firm cannot change methods of reporting tax after the lease commences, no such deduction is allowable nor can a belated resale certificate be issued.
However, since a lease that is a continuing sale is subject to California use tax only for periods the property is inside this state, the lessor may file a claim for refund for periods the leased property was located outside California. 4/13/90.