Laws, Regulations & Annotations
Business Taxes Law Guide – Revision 2014
Sales and Use Tax Annotations
505.0000 SALES TO THE UNITED STATES AND ITS INSTRUMEN-TALITIES—Regulation 1614
(b) AGENCIES NOT QUALIFYING FOR EXEMPTION
505.0602 Regional Rail Commission. A Regional Rail Commission which is a Joint Powers Agency organized pursuant to section 6500 et. seq. of the California Government Code has a primary purpose of instituting a commuter rail service between two California points. The question posed was whether a use tax imposed on the Commission's use of the vehicles would be a discriminatory tax in violation of the 4R Act as applied in the case of National Railroad Passenger Corporation v. State Board of Equalization (N.D. Cal. 1986) 652 F.Supp. 923.
The National Railroad case does not apply to this situation. In National Railroad, the consumer of the passenger rail vehicles was Amtrak, an entity created by the United States Government, and Amtrak was using the subject vehicles on actual interstate lines in actual interstate commerce. The Commission will be using the vehicles in intrastate commerce on a intrastate line. Therefore, the only exemption possibly applicable to the Commission's purchase and use of the vehicles is section 6368.5. That exemption, however, is limited to the use of rail freight cars in interstate and foreign commerce and, thus, is not applicable. 12/16/96.