Could a California tanker-truck manufacturer use vehicle exemptions when an out-of-state customer took delivery at the California plant?

Plain-English summary

A California business combined a truck cab and chassis with a tank and accessories, then sold the completed petroleum or propane tanker truck. It wanted out-of-state customers to take delivery at its California business rather than receive delivery outside the state.

Section 6388.5 did not apply because it covered trailers and semitrailers, while the completed unit was a motor truck under Vehicle Code section 410.

Section 6388 covered certain listed vehicles moved outside California within 30 days, but one condition was purchase from a dealer located outside California for use outside the state. The request did not say an out-of-state dealer sold the trucks, so the opinion assumed that condition failed and did not decide whether the business qualified as a manufacturer.

The supporting letter prints the heavy-vehicle condition as “unleaden weight of 6,000 pounds,” without saying “or more.” The live annotation says “unladen weight of 6,000 pounds or more” and states the taxpayer was a California dealer. Because the statute text and status records are absent, this page does not silently reconcile those differences.

The request, contracts, vehicle specifications and weights, dealer and manufacturer evidence, outside-customer agreements, delivery and removal records, tax computation, and actual sale outcome are absent. The letter supplies only a prospective classification based on assumed facts.

Common questions

Why was the completed tanker not a trailer or semitrailer?

The business permanently combined the tank and accessories with a cab and chassis. Counsel treated the single unit as a motor truck under Vehicle Code section 410 and Beck, not a drawn trailer under section 630 or truck tractor under section 655.

Why did section 6388.5 fail?

Counsel said that provision applied only to trailers and semitrailers. The completed tanker truck did not fit either category.

What outside-dealer fact did section 6388 require?

The described exemption required purchase from a dealer located outside California for outside use. The request did not state such a dealer sale, so counsel assumed that condition failed.

What 30-day condition did the letter describe?

The purchaser had to move the vehicle from the California manufacturer or remanufacturer's place to a point outside California within 30 days after delivery. No actual delivery or removal records are supplied.

Did counsel decide whether the client was a manufacturer?

No. Because the assumed outside-dealer condition already failed, the letter expressly declined to reach manufacturer status.

What wording differs in the live annotation?

It adds “or more” to the 6,000-pound threshold and calls the taxpayer a California dealer. The linked letter omits “or more” and bases its dealer conclusion on the absence of a stated outside dealer purchase. No statutory text or status record resolves the difference.

Citations and references

• California Revenue and Taxation Code sections 6388.5 and 6388 — cited for vehicle types, dealer location, outside use, weight, manufacturer delivery, and 30-day removal; complete authorities, correct threshold, documentation rules, amendments, later history, and current law not supplied
• California Vehicle Code sections 410, 630, and 655 and Beck v. Azcarate, 50 Cal.App.2d 264 — cited for truck, trailer, semitrailer, and tractor classification; complete authorities, facts, holding, amendments, histories, and later treatment not supplied
• December 6 request and February 6 response — no request, vehicle, dealer, manufacturer, delivery, removal, tax, audit, assessment, claim, appeal, or later outcome records supplied
• Official Annotation 325.0108's threshold and dealer wording and historical summary — differs from the supporting letter without resolving evidence, and omits manufacturer-status uncertainty, missing records, applied outcome, and reliance status

Source

• Annotated Legal Opinions collection: https://cdtfa.ca.gov/taxes-and-fees/annotations-menu.htm
• Annotation page: https://cdtfa.ca.gov/lawguides/vol2/suta/325-0000-all.html
• Original supporting opinion: https://cdtfa.ca.gov/lawguides/annotations/325-0108.pdf

Original ruling text

325.0108

STATE OF CALIFORNIA

STATE BOARD OF EQUALIZATION
1020 N STREET, SACRAMENTO, CALIFORNIA
(P.O. BOX 942879, SACRAMENTO, CALIFORNIA 94279-0001)
(916) 445-5550

February 6, 1992

Mr. A--- G--A--- S--- T--- C--XXXX --- Rd., Suite XXX
---, California XXXXX

Dear Mr. G---:
This is in response to your letter dated December 6, 1991 regarding the application of the exemptions provided by Revenue and Taxation Code section 6388 and 6388.5. You state: “A client of our firm is a manufacturer and retailer of tanker trucks that transport petroleum products and propane. The client acquires a truck cab and chassis from a truck manufacturer and then acquires a tank from a tank manufacturer. The client installs the tank and accessories onto the truck chassis. After completion of manufacture, the client sells the complete tanker truck package to California customers and to out-of-state customers.” Currently, when your client sells a tanker truck to an out-of-state customer, your client delivers the truck to the customer outside of California. However, your client would like to begin delivering the trucks to its out-of-state customers at its California business location. You ask whether, assuming your client and its out-of-state customers meet the documentation and time requirements of section 6388 and 6388.5, these transactions would qualify for exemption from tax under these provisions. Section 6388.5 applies only to trailers and semi-trailers. Section 6388 applies to trailers and semi-trailers as well as to trucks, truck tractors, trailer coaches, and auxiliary dollies. Vehicle Code section 630 defines trailer as a vehicle designed for carrying persons or property on its own structure which vehicle will be drawn by a motor vehicle and constructed so that no part of its weight rests upon any other vehicle. The term also includes a semi-trailer when used in conjunction with an auxiliary dolly, if the dolly is of the type constructed to replace the function of the draw bar and the front axle or axles of a trailer. Truck tractor is defined by Vehicle Code section 655 as a motor vehicle designed and used primarily for drawing other vehicles and not constructed so as to carry a load other than a part of the weight of the vehicle and load so drawn. When the truck tractor

Mr. A--- G---

-2-

February 6, 1992
325.0108

and trailer or semi-trailer are put together as a single unit, that unit is a truck. (Veh. Code § 410 (motor truck), Beck v. Azcarate (1942) 50 Cal.App.2d 264.) You have correctly referenced to the vehicle about which you inquire as a tanker truck. That is, a motor truck within the meaning of Vehicle Code section 410. Since only trailers and semi-trailers come within the provisions of section 6388.5, the exemption provided by section 6388.5 is not available with respect to these vehicles. The exemption provided by section 6388 is applicable to the sale of a new or remanufactured vehicle which has an unleaden weight of 6,000 pounds. To qualify for the exemption, the vehicle must be of a type listed in section 6388 and must be purchased from a dealer located outside California for use outside California. Further, the purchaser must move the vehicle from the manufacturer’s or remanufacturer’s place of business in California to a point outside California within 30 days from the date of delivery of the vehicle to the purchaser. Thus, one of the conditions for applicability of this exemption is that the vehicle is purchased from a dealer located outside California. Since you have not stated that the trucks in question are purchased from a dealer outside California, we assume that they are not and that the sales do not qualify for the section 6388 exemption on this basis. We therefore do not reach the question of whether your client qualifies as a manufacturer within the meaning of section 6388. If you have further questions, feel free to write again. Sincerely,

David H. Levine
Senior Tax Counsel

DHL:cl/0561E
cc:

--- District Administrator