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Business Taxes Law Guide—Revision 2024
Sales and Use Tax Annotations
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335.0000 Leases of Mobile Transportation Equipment— Regulation 1661
Annotation 335.0017
335.0017 Election to Report Use Tax Based on Sales Price or Fair Rental Value. A lessor is eligible to report use tax measured by the sales price of the mobile transportation equipment or its fair rental value, but does not know until six months have passed after the mobile transportation equipment first enters the state if the use of this equipment will meet the requirements of the interstate commerce exemption or the principal use is out of state.
The election to measure tax by fair rental value must be made on a timely filed return for the period in which the property is first leased. If the lessor wishes to preserve its election to pay use tax on the fair rental value of the mobile transportation equipment in the event the use in California is subject to tax, the lessor should file a timely return for the period in which the equipment first enters the state and pay tax on fair rental value. The lessor may then file a claim for refund following six months after the mobile transportation enters the state if the interstate commerce exemption applies or principal use is out of state. 5/6/93.