Ezel / Tax Rulings / CA

Was a steamship company's operation of a hotel part of its common-carrier business for section 6385?

Short answer No. Property bought for hotel operations was not used in the steamship company's common-carrier business and was not exempt on that basis.
State
CA
Ruling
Annotation 500.0120
Tax type
Sales and Use Tax
Issued
1950-10-09
Issued by
California State Board of Equalization
Requested by
A redacted correspondent concerning a steamship company's hotel
Topics
hotel operations
Source
View Original PDF

Apply this to your situation

This page answers the general question as of 1950. Ask about yours and see what current California tax law says, with citations.

Currency note: this ruling is from 1950
Subsequent statutory amendments, regulation changes, court decisions, or later rulings may have changed the analysis. Treat this page as historical context, not current tax advice. Verify current law before relying on any specific rule, rate, or position mentioned here.
Disclaimer: This October 9, 1950 staff response addressed property used in a steamship company's hotel under historical section 6385. It resolved only the common-carrier-business theory and expressly lacked enough shipping facts to decide a separate commerce exemption. It is not a ruling issued to another taxpayer, and current entity activities, property use, shipment, documents, transactions, and law control.
About this page: The plain-English summary, reader guidance, and Q&A below were written by Ezel based on the official state tax ruling. The original ruling (linked on this page as a PDF) is the authoritative source for any reliance.
View original ruling (PDF)

Plain-English summary

Operating a hotel was not part of the steamship company's common-carrier business under historical section 6385. Property sold to the company for hotel use therefore did not qualify for that carrier exemption.

The letter did not decide whether a separate interstate-shipment exemption applied. It requested more detail about how the property was shipped, what shipping documents were used, and how transportation charges were paid.

Common questions

Did ownership by a steamship carrier exempt hotel property?

No. The property had to be used in the conduct of the common-carrier business, and hotel use was outside that activity.

Did the letter decide every possible exemption?

No. The shipment-based question remained unresolved for lack of facts.

What additional facts were requested?

Shipment method, shipping documents, and transportation-charge payment details.

Citations and references

  • California Revenue and Taxation Code section 6385 — historical common-carrier-business exemption applied

Source

Original ruling text

STATE OF CALIFORNIA

500.0120

STATE BOARD OF EQUALIZATION

October 9, 1950

You have inquired whether we regard the operation of a hotel by the _ as a part of its common carrier activity, within the meaning or Section 6385 of the Sales and use Tax Law. You are advised that we do not regard property sold to the __ for use in the operation of a hotel as sold to it for use in the conduct of its business as a common carrier within the meaning of said Section 6385. Accordingly, the sale of the property to the _ or such use is not exempt from the tax under said section. From the information furnished we are unable to determine whether or not the transactions referred to are exempt as sales in intrastate commerce. We suggest, therefore, that you furnish us with more complete details as to the manner in which shipment is made, the types of shipping documents used, and the payment of transportation charges to enable us to advise you further.

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