Were receipts taxable when an ex-tax aircraft was delivered to a lessee in Mexico for exclusive use there?

Plain-English summary

A redacted treasurer's absent May 26, 1966 request proposed leasing an airplane to a company for exclusive Mexico use. The supporting PDF also prints the unexplained legacy header “2533 Aircraft leased in Mexico.”

If the lessor paid sales or use tax on the airplane's full purchase price, Tax Counsel said leasing caused no additional sales/use tax whether the aircraft was used in California or elsewhere.

If acquired ex-tax, rent for time the aircraft was physically in California was taxable. But the requester said the lessor would deliver it to the customer in Mexico for exclusive use there, so no rental receipts were taxable on the stated plan.

Counsel enclosed former Sales and Use Tax Ruling 70 and pointed specifically to paragraphs (c)(1)(B) and (c)(3). The ruling text is absent. Live Annotation 330.3660 publishes only the ex-tax Mexico-delivery/exclusive-use result, not the full-purchase-price-tax or California-time branches.

No request, aircraft, acquisition, purchase-price tax, lease, customer, delivery, physical-location/use record, rental receipt, return, audit or later outcome appears.

Common questions

Was foreign use alone the only stated fact?

No. The letter also relied on the lessor delivering the aircraft to the customer in Mexico.

What if an ex-tax aircraft spent time in California?

The opinion says receipts for the time it was physically in California would be taxable.

What if tax had already been paid on the full purchase price?

Under the historical rule described, the lessor would incur no additional sales or use tax from leasing it.

Was former Ruling 70 included with the published letter?

No. The letter says it enclosed the ruling and cites two paragraphs, but the PDF contains only the response.

What does the “2533” header mean?

The source does not explain it; the text simply prints “2533 Aircraft leased in Mexico” above the annotation number.

Did the source verify delivery or exclusive use?

No. Those facts came from the absent request, and no aircraft, lease, delivery or use record is supplied.

Citations and references

• Legacy 2533 Aircraft leased in Mexico source header — unexplained
• Former Sales and Use Tax Ruling 70(c)(1)(B) and (c)(3) — personal-property lease rules, cited and enclosed but absent
• Live Annotation 330.3660 — ex-tax Mexico-delivery and exclusive-use result dated June 1, 1966
• Request, aircraft, acquisition/tax, lease, delivery/use, rent, return, audit and outcome records — absent

Source

• Annotated Legal Opinions collection: https://cdtfa.ca.gov/taxes-and-fees/annotations-menu.htm
• Annotation page: Annotation 330.3660
• Original supporting opinion: 330.3660 PDF

Original ruling text

2533 Aircraft leased in Mexico

330.3660

STATE OF CALIFORNIA

STATE BOARD OF EQUALIZATION

June 1, 1966

Attention:

--- --Treasurer

Gentlemen:
This is in reply to your letter of May 26, 1966, concerning the application of sales and use taxes to income which you will receive from a proposed leasing of an airplane to a company which will use it exclusively in Mexico. In the event you acquire the airplane with sales or use tax paid upon the full purchase price of the airplane, you will not incur any additional sales or use tax liability by leasing it, whether the airplane will be used in this state or elsewhere. If on the other hand, you acquire the aircraft without payment of tax on the purchase price, your rental receipts received for the time the aircraft is physically in this state would be subject to tax. Inasmuch, however, as you state that the aircraft ~"ill be delivered by you to the customer in Mexico, and will be used exclusively there, your rental receipts will not be subject to the tax. We are enclosing a copy of sales and use tax ruling 70, covering leases of personal property, and refer you particularly' to paragraphs (c)(l)(B) and (c)(3).

Very truly yours,

E. H. Stetson
Tax Counsel

EHS :fb
Enclosure
cc: San Jose - District Administrator