Laws, Regulations and Annotations


Business Taxes Law Guide—Revision 2024

Sales and Use Tax Annotations

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325.0000 Interstate and Foreign Commerce—Regulation 1620

Annotation 325.1728

(c) Shipments from California to Points Outside State

(8) Use Tax

325.1728 First Functional Use of Vessel Outside California. A vessel is first functionally used outside the State of California. It is subsequently transported to California for reassembly and is thereafter transported and used outside of California. The fact that the vessel was brought into California for reassembly for the purpose of subsequently transporting it outside the State for use thereafter outside the State does not support a conclusion that, for purposes of Regulation 1620(b)(3), it is "as if the vessel never came into California." The Board does not ignore the fact that the property was brought into California. Section 6009.1 excludes property's presence in this state from "use" when the purpose of entry into California was "… for (reassembly) and (it was) used thereafter solely outside the State." Thus, if the vessel returns to California within six months, the time in California for reassembly is "use" within California and the tests set forth in Regulation 1620(b)(3) must be applied to determine the application of tax. 12/2/96.