Did Regulation 1667 require an exemption certificate to say the purchaser accepted liability if the property was used differently?

Plain-English summary

California concluded that the submitted exemption-certificate form met Regulation 1667. A valid certificate had to be written and include its date, the purchaser's or representative's signature, the purchaser's name and address, any seller's permit, a description of the property, and a statement of how the property would be used.

Regulation 1667 did not require an additional statement that the purchaser acknowledged responsibility for reporting tax if the property was later used differently. The source also separately discussed the principal-use test for vehicles sold and delivered to an Indian reservation.

Common questions

Did the certificate need the purchaser's signature?

Yes, or the signature of the purchaser's agent or employee.

Did it need to describe the property and intended use?

Yes.

Did it need an acknowledgment of later tax liability?

No.

Citations and references

• California Code of Regulations, title 18, Regulation 1667
• California Code of Regulations, title 18, Regulation 1616(d)(4)(E) (separate reservation-use discussion)
• Chief of Field Operations' March 28, 1989 memorandum — questions described; full memorandum not reproduced in the official PDF
• District certificate forms for vehicles sold and delivered to an Indian reservation or to an out-of-state purchaser, including the form submitted for review — use and contents described; blank or completed forms and underlying sale, purchaser, delivery, and use records not reproduced in the official PDF
• Assistant Chief Counsel Tom Putnam's 1978 approval of the district forms — approval identified; approval document and review record not supplied in the official PDF
• Possible later certificate use, vehicle delivery, reservation or off-reservation use, assessment, audit, or other outcome after the advice — no follow-up records or final outcomes supplied in the official PDF

Source

• Annotated Legal Opinions collection: https://cdtfa.ca.gov/taxes-and-fees/annotations-menu.htm
• Annotation page: https://cdtfa.ca.gov/lawguides/vol2/suta/222-0000-all.html
• Original supporting opinion: https://cdtfa.ca.gov/lawguides/annotations/222-0016.pdf

Original ruling text

State of California

222.0016

Board of Equalization
Legal Division (MIC:82)

Memorandum

To:

Mr. Robert Nunes
Chief of Field Operations

From:

Gary J. Jugum

Subject:

Sales to Indians:

Date:

June 2, 1989

This is in response to your memorandum of March 28, 1989. You have raised several questions regarding the sale of property which is delivered to an Indian on an Indian reservation. First, you have questioned the form used by some districts when vehicles are sold and delivered to an Indian reservation or to an out-of-state purchaser. As you know, these forms were originally approved by Assistant Chief Counsel Tom Putnam in 1978. The form submitted appears to meet all the requirements of Regulation 1667. Sales and Use Tax Regulation 1667 provides that a valid exemption certificate must be in writing and include the date, the signature of the purchaser, the purchaser’s agent, or employee, the name and address of the purchaser, seller’s permit, if any, a description of the property purchased and a statement regarding the manner in which the property will be used. It does not require a statement that the purchaser acknowledges liability and responsibility for reporting tax in the event the property is used in some other manner. We are of the opinion that a more formalized procedure is unnecessary in light of the fact that the form is of limited use to a very small number of people. Second, you question the sale of automobiles for “use on the reservation.” This test for “use” found in Sales and Use Tax Regulation 1616 is a “principal use” test. Regulation 1616(d)(4)(E) provides that use tax does not apply to the use of tangible personal property, including vehicles purchased by an Indian from an off-reservation retailer and delivered to the purchaser on a reservation, unless within the first 12 months following delivery, the property is used off a reservation more than it is used on a reservation. Thus, if the automobile is owned and

Mr. Robert Nunes

-2-

June 2, 1989
222.0016

used by an Indian on an Indian reservation, the principal use is considered to be on the reservation. When not in functional use the automobile would be “garaged” (stored or used) on the reservation. If you have further questions concerning this matter, we will be happy to discuss them with you.

MCA:cl
cc:

Ms. Judy Agan
Mr. Glenn Bystrom
Mr. Les Sorensen

bc:

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