Laws, Regulations & Annotations

Business Taxes Law Guide – Revision 2018

Sales and Use Tax Annotations

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Annotation 335.0016.950

335.0016.950 Election to Report Tax Measured by Rental Receipts. An engine was first leased in the quarter preceding the third quarter of 1973. The rentals were first reported in the third quarter. The initial rental charges for the engine were not billed or received until the third quarter of 1973.

When it is the normal business practice of a lessor to invoice its lessee for rental charges and to collect rental payments some time after the leased property is furnished to the lessee for use, it is appropriate, in certain circumstances, to recognize this business reality and to regard the lessor's election to report use tax on fair rental value as having been timely made. The circumstances which would warrant application of this interpretation would be where possession of the leased property is transferred to the lessee within the last part of the lessor's quarterly reporting period. 3/22/79; 4/24/87.