Did displaying locomotives in California for publicity create use tax before they entered service entirely outside the state?

Plain-English summary

A railroad proposed displaying locomotives in California for publicity before placing them into service entirely outside the state.

California found no use-tax liability under the stated conditions. The locomotives could be used here solely for the exhibition or publicity purpose, but not for actual California transportation service.

Common questions

Could the locomotives haul passengers or freight during the California exhibition?

No. The no-tax answer expressly assumed no actual transportation service in the state.

Where did the locomotives have to enter service afterward?

Entirely outside California.

Source

• Annotated Legal Opinions collection: https://cdtfa.ca.gov/taxes-and-fees/annotations-menu.htm
• Annotation page: https://cdtfa.ca.gov/lawguides/vol2/suta/570-0000-all.html
• Original supporting opinion: https://cdtfa.ca.gov/lawguides/annotations/570-0120.pdf

Original ruling text

570.0120

STATE OF CALIFORNIA

STATE BOARD OF EQUALIZATION

May 17, 1957

U--- P--- R--- C--XXX --- ----- --- XX, California
Attention:

Mr. E. E. B--Law Department

Gentlemen:
This is in reply to your letter of May 8 addressed to Mr. Harry L. Say, Sales Tax Administrator. Mr. Say and I have conferred concerning the question raised in your letter and we are of the opinion that the proposed exhibition in this State of the locomotives for publicity purposes will not result in the accrual of use tax liability when, following the exhibition of the locomotives, they will be placed in service entirely outside this State. It is understood, of course, that the locomotives will not be used in actual transportation service in this State and will be used solely for the exhibition or publicity purposes which you describe in your letter. Very truly yours,

E. H. Stetson
Tax Counsel

EHS:ds

cc:

Los Angeles - Compliance