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 325.2200

(c) Shipments from California to Points Outside State

(8) Use Tax

325.2200 Vehicles, Vessels and Aircraft Not Passively Transported. If the active transportation of planes, vehicles, and vessels out of California is the sole use of the item in California, the transportation is excluded from the definition of "use" as set forth in section 6009.1. Thus, if a person who purchases a vehicle from a nondealer comes into California only for the purpose of picking up the vehicle and driving it directly out of California for use solely thereafter outside California, no use tax would be applicable. On the other hand, if the purchaser is in California for some independent reason other than taking delivery of the vehicle, the purchaser's driving of the vehicle would be regarded as a taxable use.

In removing vehicles, vessels, and aircraft from California, it is not required by section 6009.1 that the purchaser takes the fastest route out of California. Rather, the question is whether the time it takes to move the property out of California is an appropriate time for direct removal. If the time period appears to be a longer period than necessary to effect direct removal, it may indicate that the purchaser is using the property in California for some additional purposes. For example, the purchaser of a vessel may stop along the way for sport fishing or may dock at California ports on its route outside California. If so, this would support the conclusion that the purchaser is making a taxable use of the vessel. On the other hand, if the purchaser could show that all stops are merely for refueling and restocking, and not for tourist or other purposes, and that there is no interruption in departing from California waters for purposes such as fishing, section 6009.1 would remain applicable and no tax would be due. 12/1/88.