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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 330.3725

(c) Continuing Sale and Purchase

330.3725 Rentals of Classroom Computers. A corporation has a "classroom" at its business site which has nine computer workstations and one server. Companies pay the corporation $100 a day to bring "students" to use the computers for instruction on the application of various software. The companies provide their own software and instruction but utilize the corporation's computers. The corporation purchased the computers for resale since they eventually will be sold to customers.

The "classroom rentals" are considered rentals or leases of the computers. Since the corporation has paid neither sales tax reimbursement nor use tax on the purchase price of the computer and the one-day charge for use of the computers on the premises or business location of the lessor is more than $20.00, the rentals are continuing sales and purchases. Accordingly, use tax is due measured by the rentals payable. When the corporation later sells the computers, these sales are also subject to tax. 3/8/97.