Laws, Regulations & Annotations

Business Taxes Law Guide – Revision 2018

Sales and Use Tax Annotations

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475.0000 RESALE CERTIFICATES—Regulation 1668

Annotation 475.0038

475.0038 Essential Elements of Resale Certificate. An out-of-state lessor purchases equipment from an out-of-state retailer for shipment to Corporation A, a California consumer. Corporation A issues a document to the out-of-state retailer that states "Corporation A is engaged in a sale and leaseback program and is exempt from California sales tax on specified equipment. California Exemption (sales tax permit number shown)."

Since the property is sold to the lessor, not the lessee, the document is not issued by the purchaser of equipment, the lessor. Also, the document does not satisfy all of the five essential elements of a valid resale certificate set forth in Regulation 1668. It is not acceptable as a resale certificate. The retailer bears the burden to establish that the property was resold. 9/29/88.