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BTLG Table of Contents > Sales and Use Tax Annotations > L > 330.0000 Leases Of Tangible Personal Property—In General > Annotation 330.2380

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

Annotation 330.2380

(a) In General

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330.2380 Nominal Option Price. Where a contract with respect to relocatable classrooms binds the customer for a fixed term and the customer has the option to purchase at the end of the term, the option price is nominal and the contract will not be regarded as a true lease if the option price does not exceed $100 or 1 percent of the total contract price, whichever is the lesser amount. But if the customer has the contractual right to terminate the arrangement and relinquish possession at any time without purchasing the property, the nominal option price will not destroy the character of the contract as a true lease. 5/28/68; 6/5/68.