Laws, Regulations & Annotations
Business Taxes Law Guide – Revision 2013
Sales and Use Tax Annotations
515.0000 SERVICE ENTERPRISES GENERALLY—Regulation 1501
(e) MISCELLANEOUS ACTIVITIES
515.1167 International Driving Permits. A California automobile insurance firm acquired blank international driving permits from the out-of-state office of an automobile association. The out-of-state automobile association, pursuant to the agreement with the United States Department of State and in accordance with international conventions, furnished the California automobile insurance firm blank serially numbered driver's permits. The California firm paid $2.00 for each permit. The out-of-state automobile association is required to keep records of the serial numbers of the permits issued. When the United Sates or foreign governments request information about an individual to whom a permit was issued, the association complies with the request by linking the serial numbers to a specific application. The Department of State is empowered to issue the permits or delegate the function to another party. The function has been delegated to the automobile association and is the only source of the permit form. Under this scenario, the California automobile insurance firm is performing a nontaxable service when it issues a permit to an individual motorist for the authorized $5.00 fee. As to its acquisition of the blank permits from the out-of-state automobile association, the relationship between the two is also predominately a service agreement and not a sales agreement. Therefore, the California firm's acquisition of the serially numbered blank permits for $2.00 each is also not subject to tax. 6/23/88.