Were rentals taxable for cameras and projectors acquired by trade-in without tax?

Plain-English summary

A redacted business's undated, absent request concerned sales tax on daily and weekly camera and projector rentals. It said tax had been paid when new equipment was purchased, while other rental equipment came from trade-ins on which tax would not be paid.

The July 26, 1965 Tax Counsel letter required no tax on rent from the reviewed equipment bought tax-paid. For untaxed trade-in equipment, the lessor had to collect and pay tax on rental receipts while the equipment was in California.

The result was effective August 1, 1965 and attributed to unidentified legislation. Counsel said an enclosed special report explained it briefly and future regulations would give more detail. The report, legislation citation and regulations are not included or identified.

Live Annotation 330.3580 instead says amounts allowed for merchandise traded in on leased merchandise enter the tax measure under the new law effective August 1. The PDF never states that allowance rule; it addresses rent on equipment obtained by trade-in. The two official sources share the date and effective-law framing but do not resolve their scope difference.

No equipment schedule, purchase or trade-in record, allowance amount, California-location evidence, rent, tax-paid proof, collection, return, audit, claim or later outcome appears.

Common questions

Was rent on the trade-in equipment taxable?

Yes, while the equipment was in California.

Was rent on the reviewed new equipment taxable?

No, because the source says tax had been paid when that equipment was purchased.

Did the supporting letter say the trade-in allowance itself entered the tax measure?

No. That statement appears in the current annotation, not in the complete supporting opinion.

What law took effect on August 1, 1965?

The PDF does not identify it by bill, chapter or code section. It only attributes the result to recently passed legislation.

Was the enclosed special report published with the letter?

No. Its title, date and text are absent, as are the promised later regulations.

Does the source show actual rental receipts or tax collection?

No. It contains advice only, with no equipment, transaction, tax or outcome records.

Citations and references

• No numbered statute, regulation, ruling or case citation appears in the supporting opinion
• Unidentified legislation effective August 1, 1965 — stated basis for the letter
• Enclosed special report and promised future regulations — referenced but unidentified and absent
• Live Annotation 330.3580 — broader trade-in-allowance measure rule dated July 26, 1965
• Request, equipment and transaction records, allowances, location evidence, rents, tax proof, collection records and later outcome — absent

Source

• Annotated Legal Opinions collection: https://cdtfa.ca.gov/taxes-and-fees/annotations-menu.htm
• Annotation page: Annotation 330.3580
• Original supporting opinion: 330.3580 PDF

Original ruling text

330.3580

STATE OF CALIFORNIA

STATE BOARD OF EQUALIZATION

July 26, 1965

--- --- ----- --- ----- --- --Gentlemen:
This is in reply to your recent letter concerning the sales tax with respect to your rentals of cameras and projectors on a daily and weekly basis. You state that tax has been paid on the new equipment and that other equipment being rented is received as a trade in. With respect to the equipment purchased by you with tax paid at the time of purchase, you are not required to pay tax on rental receipts. With respect to equipment acquired by you by way of trade-in on which tax would not be paid, you will be required to collect and pay tax on the rentals received from the rental of such equipment while it is in California. This is effective August 1, 1965 and results from passage of legislation which is briefly explained in the enclosed special report, and which will be covered in greater detail in regulations which will be available shortly after August 1. Very truly yours,

E. H. Stetson
Tax Counsel

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