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BTLG Table of Contents > Sales and Use Tax Annotations > L > 330.0000 Leases Of Tangible Personal Property—In General > Annotation 330.3305

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

Annotation 330.3305

(b) Rental Receipts—Items Included and Excluded

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330.3305 Early Termination by Purchase. Where a lessee purchases leased equipment before the end of the lease term and before the time for exercising an option to purchase under the terms of the lease contract, the agreement to purchase is a new contract and the measure of tax on the purchase is the entire amount agreed to be paid for the transfer of title, exclusive of any amount for sales tax reimbursement, regardless of the price specified in the option provision of the lease contract. If the lessee gives the lessor a security deposit at the commencement of the lease and the lessee is not in default under the lease at the time of his purchase, the amount of the deposit is also includable in the measure of tax on the purchase if it is not refunded to the lessee. 8/7/78.