Were tools and equipment exempt when a contractor bought and took delivery in California, then planned to haul them to an out-of-state federal project?

Plain-English summary

An unidentified contractor's January 30 letter planned a substantial Bureau of Reclamation project outside California. Before moving, it intended to buy tools, equipment and materials from California firms and carry them to the job site in its own trucks. The request, project contract, items, orders, invoices, trucks and deliveries are absent.

The San Diego office already had advised that “such purchases” were taxable; its record is absent. Tax counsel agreed and expressly concluded under Ruling 55 A-2-(b) that tools and equipment sold and delivered in California remained taxable despite the contractor's intention to transport them outside.

The proposal also mentions materials, but the final operative sentence names only tools and equipment. Neither the supporting PDF nor live annotation separately states the treatment of materials, so this page does not add one.

No purchase, delivery, transport, project use, tax filing, assessment, payment or later result is supplied. The live annotation preserves only the California-delivered tools-and-equipment conclusion and omits the request, Bureau project, own-truck facts, materials limitation, missing ruling enclosure and proposed posture.

Common questions

Did the contractor's outside project make the tools exempt?

No. The cited historical rule treated their California sale and delivery as taxable.

Did later transport in the contractor's trucks change the result?

No. Counsel said the purchaser's intent to move the property outside did not change the California sale.

Did the letter expressly decide materials?

Its factual proposal mentions materials, but its final conclusion expressly names only tools and equipment.

Is the cited Ruling 55 copy included?

No. The letter says a copy was enclosed, but the published PDF omits it.

Were any purchases actually completed?

The source provides no order, invoice, delivery, transport, project-use, tax or later-outcome record.

Citations and references

• Sales and Use Tax Ruling 55 A-2-(b) — cited historical California-delivery rule; stated enclosure and current law absent
• January 30 request and transaction records — planned federal project and purchases described; underlying evidence absent
• San Diego advice and March 3 response — prior advice absent; final answer expressly covers tools and equipment
• Official Annotation 325.0600 — preserves the narrow conclusion while omitting provenance and evidentiary limits

Source

• Annotated Legal Opinions collection: https://cdtfa.ca.gov/taxes-and-fees/annotations-menu.htm
• Annotation page: Annotation 325.0600
• Original supporting opinion: https://cdtfa.ca.gov/lawguides/annotations/325-0600.pdf

Original ruling text

325.0600

STATE OF CALIFORNIA

STATE BOARD OF EQUALIZATION

March 3, 1953

Your letter of January 30
Account No. 7

Gentlemen:
You ask for advice as to the application of California sales tax to the following transaction: You are presently to be engaged in constructing a project of considerable proportions for the Bureau of Reclamation outside the state of California. Prior to moving on to the job you plan to purchase various tools, equipment and materials from California firms with the intention of carrying these items on your own trucks to the out-of-state job site. Our San Diego office has informed you that such purchases would be subject to the California sales tax. It is our opinion that the advice of our San Diego office was correct. Under Ruling 55, Section A-2-(b), copy enclosed, the sale of the tools and equipment to you, since sold and delivered in California, would be sales in this State and subject to tax regardless of your intention to transport the property outside of the State.

Yours very truly

E. H. Stetson
Tax Counsel

JHM: ja
cc: San Diego - Tax Administrator