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Business Taxes Law Guide—Revision 2024
Sales and Use Tax Annotations
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330.0000 Leases of Tangible Personal Property—In General—Regulation 1660
Annotation 330.3640
(c) Continuing Sale and Purchase
330.3640 Interstate Use by Lessee. Trailers or containers used in conjunction with flat cars, e.g., piggyback equipment, are not within the category of "rail freight cars," as that term is used in section 6368.5 of the Sales and Use Tax Law. Under the provisions of section 6006.1, the granting of possession of tangible personal property by a lessor to a lessee is not limited to the initial delivery, but is a "continuing sale in this state" as respects any period of time the leased property is situated in this state "irrespective of the time or place of delivery of the property to the lessee." Even if the use by the lessee be considered as exempt from use tax because the equipment is placed in interstate use outside this state and continues in such use while the property is in this state, the sales tax applies to the rental receipts. 10/5/65. (See section 6006(g)(4) in effect November 8, 1967.)