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 570.1640

(h) CREDIT FOR TAX IMPOSED BY OTHER JURISDICTIONS

570.1640 Foreign State Tax on Storage. A foreign state provides that use tax applies to the temporary storage of goods inside that state for sales in the regular course of business outside that state. The credit provided for under section 6406 of the Revenue and Taxation Code applies only against California use tax due on the owner's own use of the property in California.

The tax in the foreign state is a tax imposed on the retailer for storing property in that state. The retailer may not take a credit for that tax against a sales tax liability it incurs in California, nor can it claim a credit against any California use tax it is required to collect, since the tax imposed by the foreign state is not imposed on the sale to or use by the California consumer. The tax imposed in the foreign state was on the retailer's purchase and use of the property in that state. The transaction being taxed in California is a different transaction, that is, the subsequent sale and purchase of the goods. A credit for tax paid to another state would be available only if the tax had been paid on this transaction. 11/29/94.