Laws, Regulations & Annotations

Business Taxes Law Guide – Revision 2014
 

Sales and Use Tax Annotations


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L

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

Annotation 330.3786

(c) CONTINUING SALE AND PURCHASE

330.3786 Vendor Reporting Tax on Property Leased without Collecting Tax Reimbursement from Lessor. The lessor is not bound by the unilateral action of the vendor who may report sales tax on the transaction without collecting reimbursement from the lessor. Thus, the lessor is regarded as reselling the property in a taxable lease transaction without regard to whether the vendor may unilaterally have chosen to pay sales tax without collecting sales tax reimbursement from the lessor. The vendor, in this situation, is entitled to a refund of the tax which it paid and the lessor owes tax on rentals. A lease is a taxable continuing sale unless the lessor pays sales tax reimbursement or use tax on purchase price. If the lessor fails to make a timely election to do so, the person selling to the lessor is making a sale for resale and the lessor is making a taxable retail sale. 9/9/85.