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BTLG Table of Contents > Sales and Use Tax Annotations > L > 335.0000 Leases of Mobile Transportation Equipment > Annotation 335.0940

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335.0000 Leases of Mobile Transportation Equipment— Regulation 1661

Annotation 335.0940

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335.0940 Leases of Rail Freight Cars. Rail freight cars are mobile transportation equipment (MTE). The purchaser's use during the six months following the date of purchase of the rail freight car determines whether the use of rail freight cars is exempt from tax under section 6368.5. If the purchaser uses the rail freight cars by leasing them, it is the lessee's use of the rail freight cars that determines whether the use qualifies for the exemption. If a lessee's principal use of the rail freight car during the six months following the date of purchase is in interstate commerce, the sale to and use by the lessor is not taxable. 8/23/96.