How did California's corrected annotation treat an out-of-state aircraft brought into California before or after the historical 90-day period?

Plain-English summary

David H. Levine's October 25, 1989 memorandum to Donald J. Hennessy proposed revising an older aircraft-leasing annotation. The old Annotation 330.1840 was dated October 5, 1965, before the 1967 amendment to section 6006 adding the mobile transportation equipment (MTE) provision in subdivision (g)(4). Levine directed renumbering it under Title 335.

The proposed first replacement paragraph presumes purchase for California use and applies use tax to the airplane's purchase price. If use is limited to leasing, a timely election allows measurement by fair rental value. The second replacement paragraph says leasing MTE is use by the lessor, not a sale; where the purchaser's California use is not subject to use tax, its lease is not subject to that tax either.

The PDF does not include the full preexisting annotation or the entry-period facts those paragraphs replace. The live annotation supplies those historical scenarios: entry less than 90 days after delivery, and more than 90 days of use before first California entry. They come from the live entry, not from a reconstructed missing memorandum.

Publication history and source limits

A June 5, 1992 note says a May 15, 1991 memorandum could not be found and explained how to read the annotation after an incorrect transcription. The two proposed paragraphs had been published as the entire annotation even though they were only replacements for parts of the prior text. The note does not reproduce the missing memo or establish its complete contents.

A January 5, 1999 note says this annotation became 335.0003 and that the number 330.1840 was subsequently reused for an unrelated issue. A search by the old number therefore does not identify the same legal record without checking its date and subject.

This page's issue date is October 25, 1989, the visible formal memorandum date. The later notes retain their own dates. The live entry lists both October 25, 1989 and May 15, 1991 and amendment markers “Am. 2006–1; Am. 2008–1,” but it does not restore the missing 1991 memo or explain each later amendment.

The live entry separately cites Regulation 1620(b)(5) for an October 2, 2004 through June 30, 2007 rule: under certain conditions, vehicles, vessels and aircraft brought into California within 12 months of purchase were presumed acquired for California storage, use or consumption. That historical note does not appear in the 1989 PDF. Neither the 90-day scenarios nor the time-limited 12-month note should be presented as a verified current aircraft-tax rule.

No individual buyer, plane, purchase price, delivery or entry date, use log, lease, election or taxpayer outcome is supplied. This record corrects an annotation; it does not decide an identified aircraft transaction.

Common questions

What happened if the aircraft entered within 90 days?

The historical rule presumed California use and applied tax, subject to fair-rental-value reporting for lease-only use after a timely election.

What happened after more than 90 days of out-of-state use?

The historical annotation treated the aircraft as not purchased for California use, and a later MTE lease did not itself create tax.

Why does this page use the 1989 issue date?

The visible formal memorandum is dated October 25, 1989. The source explicitly says the May 15, 1991 memo is missing; a reference to that absent document cannot replace the date of the one actually published.

Is today's Annotation 330.1840 the original aircraft opinion?

No. The January 5, 1999 note says the number was reused and the current 330.1840 is unrelated.

Citations and references

• California Revenue and Taxation Code section 6006(g)(4)
• California Sales and Use Tax Regulation 1620(b)(5), in the official historical note
• Official annotation dates: October 25, 1989 and May 15, 1991; amended 2006-1 and 2008-1

Verbatim support

From the published revision memorandum and notes:

Apparently, the 5/15/91 memo is not around (I can’t find it in my files either).

The paragraphs above were to replace paragraphs in the previous annotation – they were not meant to be the entire annotation.

the current 330.1840 is unrelated to this issue.

Source

• Annotated Legal Opinions collection: https://cdtfa.ca.gov/taxes-and-fees/annotations-menu.htm
• Annotation page: https://cdtfa.ca.gov/lawguides/vol2/suta/335-0000-all.html
• Original supporting opinion: https://cdtfa.ca.gov/lawguides/annotations/335-0003.pdf

Original ruling text

State of California

Board of Equalization
Legal Division (MIC:82)

335.0003

Memorandum

To:

Mr. Donald J. Hennessy

From:

David H. Levine

Subject:

Annotation 330.1840 (10/5/65)

Date:

October 25, 1989

This annotation applies to leases of aircraft and was written before the amendment in 1967 to Section 6006 which added subdivision (g)(4) for MTE. This annotation should be renumbered and placed under Title 335, leases of MTE, and should be revised. The first subparagraphs (a), (b), and (c) should be reworded into one paragraph: (a) It is presumed that the purchase was made for use in California, and use tax applies to the purchase price of the plane unless the use of the plane will be limited to leasing. If so, the use tax liability of the purchaser may be paid measured by the fair rental value of the plane if the purchaser makes a timely election to do so. The second subparagraph (b) should be revised as follows: (b) Since the lease of MTE is not a sale pursuant to Revenue and Taxation Code Section 6006(g)(4) but rather is regarded as use by the lessor, and since use tax does not apply to the purchaser’s use of the plane in California, use tax also does not apply to the purchaser’s lease of the plane.

DHL:wak
1652C

Apparently, the 5/15/91 memo is not around (I can’t find it in my files either). However, that memo simply set forth how the annotation should be read since it was originally incorrectly transcribed. That is, the annotation was originally published with only the (a) & (b) above, which was incorrect. The paragraphs above were to replace paragraphs in the previous annotation – they were not meant to be the entire annotation. DHL 6/5/92.

This annotation was replaced by 335.0003. The number 330.1840 was then revised – i.e., the current 330.1840 is unrelated to this issue. DHL 1/5/99.