Laws, Regulations & Annotations

Business Taxes Law Guide – Revision 2014
 

Sales and Use Tax Annotations


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U

570.0000 USE OF PROPERTY IN STATE AND USE TAX GENERALLY

Annotation 570.1360

(f) LOST OR DESTROYED PROPERTY

570.1360 Destruction of Defective Property. A TV cable bought from an out-of-state vendor for use in California was stored for two years in California and subsequently destroyed by the buyer because the cable was allegedly defective. Use tax was applicable to the purchase price of the cable even if the cable was voluntarily destroyed before it was used for the purpose it was bought, because "use" included any exercise of right of ownership over the cable. Storage and voluntary destruction of the cable were acts incident to the exercise of the right of ownership. The price of the cable could not be excluded as "Defective Merchandise" because there was no evidence that the cable was defective. The amount paid by the vendor to the buyer pursuant to the settlement agreement was not a refund due to defective cable. 12/18/69.