What portions of low-emission vehicles and retrofit devices qualified for the historical section 6356.5 exemption?

Plain-English summary

The source is a short November 13, 1992 internal memorandum transmitting an attached annotation and inviting further abbreviation. It supplies no underlying request, statutory analysis, effective or repeal dates, certification material, labels, invoices, contracts, vehicles, devices, exemption claims, or approval record.

The historical annotation said section 6356.5(a) exempted the incremental cost of a new low-emission vehicle certified by the Air Resources Board when that incremental cost was separately stated on the manufacturer's vehicle label, the manufacturer's invoice to the retailer, and the retailer's sales contract. It defined incremental cost as the difference between the actual low-emission vehicle price and the suggested retail price of a comparably equipped conventional-fuel vehicle.

Section 6356.5(b) separately exempted qualifying retrofit devices when required low-emission labeling and manufacturer-to-retailer documentation accompanied the device and the retailer's contract identified it. The exemption applied to a kit or a device installed on the customer's vehicle, and installation generally qualified as exempt installation or repair labor.

But when a dealer bought a vehicle, installed the device, and then sold the vehicle, the source treated the entire used-vehicle selling price as taxable rather than an exempt new low-emission vehicle or retrofit-device sale.

The live Annotation 315.0150 adds “new” to the attachment's opening vehicle description and otherwise publishes these rules, but omits the internal revision provenance, absence of supporting records, later statutory status, and any actual transaction or outcome.

Common questions

Was the entire new low-emission vehicle price exempt?

No. The source described an exemption for the separately documented incremental cost.

Could a retrofit kit qualify?

Yes, under the historical labeling and documentation conditions.

Did a dealer-retrofitted used vehicle qualify?

No.

Citations and references

• California Revenue and Taxation Code section 6356.5(a) — then-current certified-vehicle incremental-cost exemption; complete text, effective and repeal dates, definitions, certification and documentation rules, exceptions, amendments, later history, and current law not supplied
• California Revenue and Taxation Code section 6356.5(b) — then-current retrofit-device exemption and dealer-retrofitted-used-vehicle limit; complete text, effective and repeal dates, definitions, standards, installation rules, exceptions, amendments, later history, and current law not supplied
• November 13, 1992 Gordon P. Adelman memorandum to Don Fillman — no request, research, revision history, comments, approval, statute copy, agency material, effective-date analysis, taxpayer, or transaction record supplied
• Attached annotation — no certification, label, package, manufacturer document, invoice, contract, price comparison, kit, device, vehicle, installation, dealer, customer, sale, audit, exemption claim, or later outcome record supplied
• Official Annotation 315.0150's vehicle, incremental-cost, certification, documentation, retrofit-device, installation, used-vehicle, and date rules — live annotation adds “new” to the attachment's opening description but omits the internal provenance, missing support, later statutory status and outcome, and reliance status and supplies no additional record

Source

• Annotated Legal Opinions collection: https://cdtfa.ca.gov/taxes-and-fees/annotations-menu.htm
• Annotation page: https://cdtfa.ca.gov/lawguides/vol2/suta/315-0000-all.html
• Original supporting opinion: https://cdtfa.ca.gov/lawguides/annotations/315-0150.pdf

Original ruling text

State of California

Board of Equalization
Legal Division

Memorandum

315.0150

To:

Mr. Don Fillman

November 13, 1992

From:

Gordon P. Adelman

Subject:

Annotation – Low Emission Motor Vehicles and Retrofit Devices Attached is the annotation for the above. You may wish to abbreviate it further. GPA:sr Attach.

Annotation
Low Emission Motor Vehicles and Retrofit Devices
Pursuant to Section 6356.5(a), Revenue and Taxation Code, incremental costs of the sale of and the storage, use, or other consumption in this state of low emission motor vehicles certified by the Air Resources Board are exempt from tax provided the incremental cost is separately stated on the manufacturer’s label affixed to the vehicle, the manufacturer’s invoice to the retailer, and the retailer’s contract of sale with the purchaser. Incremental cost is the difference between the actual price of a new low emission vehicle and the manufacturer’s suggested retail price for a comparably equipped conventional fuel vehicle. Pursuant to Section 6356.5(b), Revenue and Taxation Code, the sale of, and the storage, use or other consumption in this state of any retrofit device is exempt from tax provided low emission labeling appears on the device itself or its packaging, the documentation from the manufacturer to be retained by the retailer upon sale, and the retailer’s contract of sale with the customer. A retrofit device is exempt when sold as a kit or when installed on a customer’s vehicle. The labor to install will generally qualify as exempt installation or repair labor. If the dealer purchases a vehicle, installs the retrofit device and sells the vehicle with the device, the vehicle does not qualify as a new low emission vehicle, nor is it a sale of a retrofit device, and the entire selling price of the used vehicle is a taxable transaction not exempt pursuant to Section 6356.5(a) or (b).