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BTLG Table of Contents > Sales and Use Tax Annotations > L > 330.0000 Leases Of Tangible Personal Property—In General > Annotation 330.2115

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330.0000 Leases of Tangible Personal Property—In General—Regulation 1660

Annotation 330.2115

(a) In General

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330.2115 Credits Against Rental Charges. Although the lessee was responsible for the repairs on the leased equipment under the lease contract, both parties subsequently agreed to split 50–50 the cost of a major repair. They also agreed that the lessee would pay the repairer's bill and credit the lessor's share of the repair bill against each monthly rental charge until the lessor's charge was paid back to the lessee.

The agreed net form of payment for the repairs was only a procedural matter of convenience rather than a substantive waiver of monthly rental consideration. The rental consideration for the lease was still subject to use tax and thus the tax was collectible by the lessor from the lessee at the time of the credit allowance. 3/7/95.