Laws, Regulations & Annotations
Business Taxes Law Guide – Revision 2014
Sales and Use Tax Annotations
330.0000 LEASES OF TANGIBLE PERSONAL PROPERTY—IN GENERAL—Regulation 1660
(c) CONTINUING SALE AND PURCHASE
330.3638 Equipment Leasing. A partnership was established to lease equipment to a corporation of which the partners were also corporate officers. The partnership purchased equipment in Minnesota which was shipped by common carrier to California. The vendor added 6½% sales tax. The partnership believes that since the payment of the tax is equal to the California tax rate, it should be deemed to have made a timely election to pay its use tax based on cost and not be required to report based on rental receipts.
Since the Minnesota statute provides that a sale is exempt if the property is shipped outside of Minnesota, the sale appears to be exempt from Minnesota's tax as a sale in interstate commerce. There is no evidence to show that the vendor remitted the money to the State of California. Since any tax remitted to the State of Minnesota was paid in error and is subject to refund, an offset cannot be allowed. Unless the partnership can show that the tax was due to the State of Minnesota or that the vendor directed the money to the State of California, tax is due measured by the lease receipts. 1/16/91.