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Business Taxes Law Guide—Revision 2024
Sales And Use Tax Law
Revenue and Taxation Code
Division 2. Other Taxes
Part 1. Sales and Use Taxes
Chapter 4. Exemptions
Article 3. Exemptions from Use Tax
Section 6404
6404. Property loaned to educational institutions. (a) The loan by any retailer of any tangible personal property to any school district for an educational program conducted by the district is exempt from the use tax.
(b) The loan by any retailer of any motor vehicle to the University of California or to the California State University for the exclusive use in an approved driver education teacher preparation certification program conducted by the university or the state university is exempt from the use tax.
(c) The loan by any retailer of a motor vehicle to be used exclusively for driver training in an accredited private or parochial secondary school in a driver education and training program approved by the State Department of Education as a regularly conducted course of study is exempt from the use tax.
(d) The loan by any retailer of any motor vehicle to a veterans hospital or such other nonprofit facility or institution to provide instruction in the operation of specially equipped motor vehicles to disabled veterans is exempt from the use tax.
(e) If the retailer makes any other use of the property except retention, demonstration, or display while holding it for sale in the regular course of business, the use is taxable to the retailer under Chapter 3 (commencing with Section 6201) as of the time the property is first so used, and the sales price of the property to the retailer is the measure of the tax.
History—Added by Stats. 1956, p. 141, in effect July 3, 1956. Stats. 1967, p. 1906, in effect November 8, 1967, reworded the section to make applicable to all tangible personal property loaned to a school district for an educational program.
Stats. 1970, Ch. 1546, in effect September 2, 1970, divided former section into paragraphs (a) and (e) and added new paragraphs (b), (c) and (d). Identical amendments were made by Stats. 1970, p. 3141, in effect September 20, 1970. Stats. 1983, Ch. 143, in effect January 1, 1984, substituted "University of California or to the California State University" for "California State Colleges or the University of California" after "to the" and "university or the state university" for "state college or university" in subdivision (b), and deleted "of this part" after "Section 6201" in subdivision (e).