Laws, Regulations & Annotations
Business Taxes Law Guide – Revision 2014
Sales and Use Tax Annotations
335.0000 LEASES OF MOBILE TRANSPORTATION EQUIPMENT— Regulation 1661
335.0078.050 Subleases of MTE. Since leases of MTE are excluded from the definition of "sales" or "purchases," the lessor is the consumer of the MTE and should pay tax or tax reimbursement upon its acquisition. However, lessors purchasing MTE for the specific purpose of leasing it may issue a resale certificate to their vendors and elect to pay their use tax liability based on the "fair rental value," provided the election is made on or before the due date of a return for the period in which the MTE is first leased. The lessor is not relieved of the liability for the tax by accepting a resale certificate from a lessee who subleases the MTE to a third party even though the sublessee reports tax on sublease proceeds. The liability resides with the purchaser/prime-lessor and his failure to abide by the terms of the election results in use tax being due on the purchase price. 4/25/84.