Was a truck rental estimated at five to six months a lease for more than 31 days if the renter could end it on 24 hours' notice?

Plain-English summary

A lease contract reportedly estimated that a one-way rental truck would be used for five to six months. But the lessee had an absolute right to end the lease on 24 hours' notice.

The Board memorandum treated 24 hours—not the five-to-six-month estimate—as the only definite lease term. It compared the arrangement to an open-end local rental whose duration depends on how long the customer keeps the vehicle and concluded that the lease was for less than 31 days.

That was a narrow answer. The memorandum expressly assumed that section 6024's other conditions were met. It did not decide or document those other requirements.

Contract limit and missing evidence

The conclusion depended on an unconditional termination right. The source does not say that either party guaranteed a five-to-six-month minimum, or that the lessee owed rent after exercising its 24-hour right.

The underlying request and contract are not included. The source therefore does not establish the complete agreement, the vehicle's specifications, how the truck was used, whether it was identified to the Board, how long the actual rental lasted, or whether section 6024's other conditions were satisfied.

The live annotation preserves the same estimated term, unconditional 24-hour termination right, open-end-rental comparison, and less-than-31-day conclusion. It also states that the short-term category is addressed in Regulation 1661(a)(1)(C).

Common questions

Did the estimated five-to-six-month period make this a long-term lease?

No. On the stated terms, the memorandum treated the unconditional 24-hour termination right as the only definite duration.

Did the memorandum decide that the rental satisfied every one-way-truck requirement?

No. It expressly assumed the other conditions of section 6024 were met.

Does the source show the complete contract or the actual rental period?

No. It describes the relevant clause, but the request, contract, and performance records are absent.

Citations and references

• California Revenue and Taxation Code section 6024
• California Sales and Use Tax Regulation 1661(a)(1)(C), cited by the live annotation
• Underlying request and lease contract — referenced but not included

Verbatim support

From the official April 10, 1975 memorandum:

It is my opinion that under such a case the only definite term of the lease contract is 24 hours since the lessee is given an unconditional right to terminate the lease contract at the end of that period.

Summarily, it is my opinion that the lease contract is for less than 31 days.

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://www.cdtfa.ca.gov/lawguides/annotations/335-0062.pdf

Original ruling text

State of California

Board of Equalization

Memorandum

To:

Mr. Joseph Manarolla

From:

Glenn L. Rigby

Subject:

One-way Rental Trucks – Section 6024

335.0062

Date:

April 10, 1975

Assuming the other conditions of Section 6024 are met, you ask whether a lease contract that has an “estimated” term of five to six months but gives the lessee the absolute right to terminate upon 24 hours’ notice will qualify as being for a term of not more than 31 days. It is my opinion that under such a case the only definite term of the lease contract is 24 hours since the lessee is given an unconditional right to terminate the lease contract at the end of that period. I have difficulty in seeing any substantial difference between this contract than an openend contract that you might have at your local rental dealer where the contract term depends on how long the lessee wishes to keep it. Summarily, it is my opinion that the lease contract is for less than 31 days.

GLR:lb
cc:

Mr. Robert Nunes
Mr. T. P. Putnam