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Business Taxes Law Guide – Revision 2021
 

Sales And Use Tax Law

CHAPTER 4. EXEMPTIONS

Article 2. Exemptions from Sales Tax

Section 6388.5


6388.5. New or remanufactured trailers purchased for out-of-state or interstate commerce use.

(a) Notwithstanding Section 6388, whenever a new, used, or remanufactured truck or a new or remanufactured trailer or semitrailer , any of which has an unladen weight of 6,000 pounds or more that has been manufactured or remanufactured outside this state is purchased for use without this state and is delivered by the manufacturer, remanufacturer, or dealer to the purchaser within this state, and the purchaser drives or moves the vehicle to any point outside this state within 30 days from and after the date of delivery, or whenever a new, used, or remanufactured truck or a new or remanufactured trailer or semitrailer, any of which has an unladen weight of 6,000 pounds or more that has been manufactured or remanufactured in this state is purchased for use without this state and is delivered by the manufacturer, remanufacturer, or dealer to the purchaser within this state, and the purchaser drives or moves the vehicle to any point outside this state within 75 days from and after the date of delivery, there are exempted from the taxes imposed by Part 1 (commencing with Section 6001), Part 1.5 (commencing with Section 7200), and Part 1.6 (commencing with Section 7251) the gross receipts from the sale of and the storage, use, or other consumption of the vehicle within the state, if the purchaser or the purchaser's agent furnishes the following to the manufacturer, remanufacturer, or dealer:

(1) (A) Written evidence of an out-of-state license and registration for the vehicle.

(B) In cases where the vehicle is subject to the permanent trailer identification plate program under Section 5014.1 of the Vehicle Code and is used exclusively in interstate or foreign commerce, or both, written evidence of the purchaser's or lessee's United States Department of Transportation number or Single State Registration System filing may be substituted for the written evidence described in subparagraph (A).

(2) The purchaser's affidavit attesting that the purchaser purchased the vehicle from a dealer at a specified location for use exclusively outside this state, or exclusively in interstate or foreign commerce, or both.

(3) The purchaser's affidavit that the vehicle has been moved or driven to a point outside this state within the appropriate period of either 30 days or 75 days of the date of the delivery of the vehicle to the purchaser.

(b) This section shall become inoperative on January 1, 2024, and as of that date is repealed.

History—Added by Stats. 1974, Ch. 1406, effective January 1, 1975. Stats. 1982, Ch. 1223, in effect September 22, 1982, added "which has been manufactured outside this state" before "is purchased," "or dealer" after the first "manufacturer," "or whenever … delivery" after the first "delivery," "and" before "Part 1.6," deleted "and Part 17 … 37001" after "Section 7251)," and added "or dealer" after the third "manufacturer" in the first sentence; added "or she" after "he" and "or foreign" after "interstate" in subdivision (b); added "the appropriate period of either" after "within", "or 75 days" after "30 days," and "or her" after "him" in subdivision (c); and substituted "the" for "such" before "vehicle" in five places throughout the section. Stats. 1983, Ch. 1286, in effect January 1, 1984, included "remanufacturers" within the scope of the exemption and substituted "if" for "provided that" before the fifth "the purchaser" in the first sentence. Stats. 2001, Ch. 826 (AB 1472), in effect January 1, 2002, substituted "that" for "which" after "pounds or more" twice, and added "or the purchaser's agent" after "if the purchaser" in the first paragraph; added paragraph designation (1) before "Written evidence", and added paragraph (2) in subdivision (a). Stats . 2019, Ch. 226 (AB 321), effective September 5, 2019, inoperative January 1, 2024 designated the first paragraph as subdivision (a), substituted "new, used, or remanufactured truck or a new or remanufactured trailer or semitrailer, any of which has" for "new or remanufactured trailer or semitrailer with" in two places in subdivision (a); redesignated former subdivisions (a)(1) and (a)(2) as subdivisions (a)(1)(A) and (a)(1)(B); redesignated former subdivisions (b) and (c) as subdivisions (a)(2) and (a)(3); added subdivision (b); substituted "subparagraph (A)" for "paragraph (1)" in subparagraph (a)(1)(B); substituted "the purchaser" for "he and she" in subdivision (a)(2); and substituted "the purchaser" for "him and her" in subdivision (a)(3).

Note.—This section was preceded by an uncodified exemption enacted by Stats. 1970, Ch. 1456.

Note.—Section 3 of Stats. 2019, Ch. 226 (AB 321) specifies:

(a) It is the intent of the Legislature to apply the requirements of Section 41 of the Revenue and Taxation Code to this act.

(b) With respect to Section 6388.5 of the Revenue and Taxation Code , as amended by this act, the Legislature finds and declares as follows:

(1) The goal of Section 6388.5 of the Revenue and Taxation Code , as amended by this act, is to bring parity to the law regulating interstate commerce, and to allow commercial trucks to meet the same requirements as commercial trailers that are purchased in the state for use either entirely outside the state or strictly in interstate commerce.

(2) The goal of this policy is to increase sales of commercial trucks that have an unladen weight of 6,000 pounds or more that will be used in interstate commerce.

(c) To measure the goals set forth in subdivision (b), the Legislative Analyst's Office shall measure how many in-state truck deliveries were affected by Section 6388.5 of the Revenue and Taxation Code, as amended by this act, and will report to the Legislature biannually on its findings.


Text of section operative January 1, 2024

6388.5. New or remanufactured trailers purchased for out-of-state or interstate commerce use

(a) Notwithstanding Section 6388, whenever a new or remanufactured trailer or semitrailer with an unladen weight of 6,000 pounds or more that has been manufactured or remanufactured outside this state is purchased for use without this state and is delivered by the manufacturer, remanufacturer, or dealer to the purchaser within this state, and the purchaser drives or moves the vehicle to any point outside this state within 30 days from and after the date of delivery, or whenever a new or remanufactured trailer or semitrailer with an unladen weight of 6,000 pounds or more that has been manufactured or remanufactured in this state is purchased for use without this state and is delivered by the manufacturer, remanufacturer, or dealer to the purchaser within this state, and the purchaser drives or moves the vehicle to any point outside this state within 75 days from and after the date of delivery, there are exempted from the taxes imposed by Part 1 (commencing with Section 6001), Part 1.5 (commencing with Section 7200), and Part 1.6 (commencing with Section 7251) the gross receipts from the sale of and the storage, use, or other consumption of the vehicle within the state, if the purchaser or the purchaser’s agent furnishes the following to the manufacturer, remanufacturer, or dealer:

(1) (A) Written evidence of an out-of-state license and registration for the vehicle.

(B) In cases where the vehicle is subject to the permanent trailer identification plate program under Section 5014.1 of the Vehicle Code and is used exclusively in interstate or foreign commerce, or both, written evidence of the purchaser’s or lessee’s United States Department of Transportation number or Single State Registration System filing may be substituted for the written evidence described in subparagraph (A).

(2) The purchaser’s affidavit attesting that the purchaser purchased the vehicle from a dealer at a specified location for use exclusively outside this state, or exclusively in interstate or foreign commerce, or both.

(3) The purchaser’s affidavit that the vehicle has been moved or driven to a point outside this state within the appropriate period of either 30 days or 75 days of the date of the delivery of the vehicle to the purchaser.

(b) This section shall become operative on January 1, 2024.

History—Added by Stats. 2019, Ch. 226 (AB 321), operative January 1, 2024.