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BTLG Table of Contents > Uniform Local Sales and Use Tax Annotations > 700.0000 Application of Tax > Annotation 700.0005

Uniform Local Sales and Use Tax Annotations

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700.0000 Application of Tax—Regulation 1803

Annotation 700.0005

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700.0005 Allocation of Local Use Tax for Transactions of $500,000 or More. An out-of-state retailer sold voting machines to a California county. The transaction totaled more than $500,000 and, prior to the election; the machines were shipped to and stored at a county storage facility within a city in that county. A question was raised as to whether the use tax on the first functional use of the voting machines should be allocated directly to the city where the machines were first stored or directly to the cities and county where the machines were first used for voting purposes.

Voting machines are designed to gather votes in an election. Therefore, first functional use of the voting machines occurs when the voting machines are used in an election and Regulation 1802(d)(1) mandates that the local use tax be reported to the jurisdiction where each machine was first used to gather votes in an election. The local use tax should not be allocated to any location to which a machine was delivered or where a machine was stored prior to such use.

Generally, a retailer is able to ascertain where it shipped property rather than where its customer actually puts the property to its first functional use and the retailer will allocate the local use tax to the ship-to location. However, BOE staff may review the transactions on a case-by-case basis to determine the actual location of first functional use. If the location of first functional use is different from the delivery or storage location, the tax should be reallocated to the location of first functional use. 9/2/08. (2010-1).