Laws, Regulations & Annotations
Business Taxes Law Guide – Revision 2016
Sales and Use Tax Annotations
335.0000 LEASES OF MOBILE TRANSPORTATION EQUIPMENT— Regulation 1661
335.0910 Lease of Buses to State of California. Even though buses leased to the State of California are exempt from vehicle registration fees, their use is not exempt under the California Sales and Use Tax Law. The sale of mobile transportation equipment (MTE) such as buses to a person who will lease that property is a retail sale and the sale to the lessor, or the use by the lessor (by leasing), is subject to sales or use tax. The lessor of these buses to the State of California may pay tax or tax reimbursement on the purchase price or on the fair rental value as explained in Regulation 1661. 12/30/96.