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Business Taxes Law Guide—Revision 2024
Sales and Use Tax Annotations
A B C D E F G H I J L M N O P R S T U V W X
U
565.0000 United States Contractors
Annotation 565.0165
(a) In General
565.0165 Resale Certificates vs. Exemption Certificates. Federal contractors may not purchase property extax under Aerospace v. State Board of Equalization (1990), 218 Cal.App.3d 1300 by issuing the vendor an exemption certificate. The relevant exemption is for sales of tangible personal property to the United States, not for sales of tangible personal property to United States supply contractors. The Aerospace decision related only to whether certain property was regarded as resold to the United States prior to the contractor's use or instead was used by the contractor. If the former, the contractor is entitled to purchase the property extax for resale, and the sale to the United States is exempt. If the latter, the sale to the contractor is taxable. When a contractor's supply contract with the United States comes within the Aerospace rule (i.e., the contractor is regarded as selling property in the form of tangible personal property to the United States prior to any use) it may purchase such property extax for resale by issuing the vendor a resale certificate. If however, title to the property does not pass to the United States prior to the contractor's use, the contractor may not purchase the property extax for resale. 3/31/94.