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 475.0168.165

475.0168.165 Purchase of Meals by Government Contractor. As a result of the decision in Aerospace v. State Board of Equalization (1990 218 Cal.App.3d 1300), a government contract may treat indirect costs, such as overhead expenses, properly allocable to its government contracts as purchases for resale to the United States if the government contract involved contains appropriate title passage clauses. A restaurant may sell meals ex-tax to a government contractor if the contractor issues a valid and timely resale certificate which includes a statement that the specific property is being purchased for resale to the Federal government, pursuant to the contract and in the regular course of business.

(Note: the sale must be to the contractor and not merely to employees of the contractor who receives expense reimbursement.) 11/15/93.