Was the federal luxury tax effective in 1991 included in California gross receipts for covered sales and leases?

Plain-English summary

Effective January 1, 1991, the federal government imposed a 10 percent retail excise tax on the first retail sale of vehicles, boats, aircraft, jewelry, and furs above specified price thresholds.

California excluded that federal retail tax from gross receipts. The exclusion applied whether the covered transaction transferred title or was a lease treated as a sale and purchase under California law.

Common questions

Was the 1991 federal luxury tax included in California gross receipts?

No.

Did the exclusion cover qualifying lease transactions?

Yes, when the lease was treated as a sale and purchase under the cited California provisions.

Does this historical opinion state current federal luxury-tax law?

No.

Citations and references

• California Revenue and Taxation Code sections 6006, 6010, and 6012(c)(4)(A) and referenced subparagraph (B)
• Unidentified new federal luxury retail-excise-tax law effective January 1, 1991 — 10 percent rate and covered property described; title, public-law number, Internal Revenue Code section, enacted text, and price thresholds not supplied in the official PDF
• Possible covered vehicle, boat, aircraft, jewelry, fur, title-transfer, or lease transactions — transaction classes described; no contracts, invoices, lease records, tax computations, or payments supplied in the official PDF
• Source-printed phrase "‘gross receipt’ do not include" and missing terminal punctuation after section 6010 — printed text preserved; not silently corrected
• Possible later federal amendment or repeal, California guidance, return treatment, audit, assessment, refund claim, appeal, or other application after the memorandum — no follow-up or outcome 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/235-0000-all.html
• Original supporting opinion: https://cdtfa.ca.gov/lawguides/annotations/235-0105.pdf

Original ruling text

State of California

Board of Equalization

235.0105

Memorandum
To:

Mr. Glenn A. Bystrom

From:

Gary J. Jugum

Subject:

New Federal Excise Tax Law – Tax on Luxury Items

Date:

December 6, 1990

Effective January 1, 1991, the United States has imposed a new retail excise tax, on the first retail sale of vehicles, boats, aircraft, jewelry and furs, to the extent that the price for such goods exceeds certain specified amounts. The rate of tax is 10 percent. Under subdivision (c) (4) (A) of Revenue and Taxation Code Section 6012, “gross receipt” do not include: “The amount of any tax (not including, however, any manufacturers’ or importers’ excise tax, except as provided in subparagraph (B)) imposed by the United States upon or with respect to retail sales whether imposed upon the retailer or the consumer.” The new tax is excludable from “gross receipts,” under the provision quoted above. The amount of any such tax is nontaxable under the Sales and Use Tax Law, whether imposed with respect to a sale involving a transfer of title or a lease transaction which is treated as a “sale” and “purchase” under Revenue and Taxation Code sections 6006 and 6010 Any questions concerning this issue should be directed to Ms. Elizabeth Abreu GJJ:sr cc:

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