Did California use tax turn on a car buyer's residence or on the buyer's actual intent when purchasing outside the state?

Plain-English summary

California explained that automobile use tax depended on whether the car was purchased for California storage or use, not simply on whether the buyer was a California resident.

If the buyer intended California use at purchase and actually used the car here, tax applied. If the buyer lacked that intent and came to use the car here only after a later change of plans, California would treat the tax as inapplicable if the buyer overcame the statutory presumption for property brought into the state.

The letter suggested affidavits, travel orders, or changes in duty assignment as evidence capable of establishing that the buyer lacked California-use intent at the time of purchase. A later change of plans alone did not establish that original intent.

Common questions

Did nonresident status automatically prevent tax?

No. A nonresident could still buy property for California use.

Did California use automatically prove original intent?

It created a presumption, but the buyer could submit satisfactory contrary evidence.

Citations and references

• Cal. Rev. & Tax. Code § 6246 — historical presumption for property shipped or brought into California by the purchaser

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/570-0940.pdf

Original ruling text

570.0940

STATE OF CALIFORNIA

STATE BOARD OF EQUALIZATION

March 31, 1950

A--- C--- of S--- C--P.O. Box XXX
XXXX – Xth Street
---, California

Attention:

Mr. O. K. C--District Manager

Gentlemen:
In answer to your letter of February 21, we advise that the California Sales and Use Tax Law imposes a use tax on the sales price of tangible personal property purchased for storage, use, or other consumption in this State whenever the sale of the property to the user is exempt from sales tax because the sale occurs outside this State, or is a sale in interstate commerce. Thus, where a purchaser of an automobile purchase it outside the State for use in this State, the use tax applies, irrespective of the residence of the purchaser. Ordinarily, where the purchaser is a resident of this State, there is no doubt but that the use tax is applicable. On the other hand, if the purchaser is not a resident of this State, the tax may nevertheless be applicable if in fact the property was purchased for use in this State. If at the time of purchase the purchaser actually intends to use the car in this State and does so use it, the tax, in our opinion, applies. If, on the other hand, at the time of purchase the purchaser did not intend to use the car in this State, we will regard the tax as not applicable, even though through a subsequent change of intention the car is used in this State. There is a presumption in the Sales and Use Tax Law (Section 6246) that tangible personal property shipped or brought to this State by the purchaser was purchased for storage, use, or other consumption in this State. It is, therefore, necessary for a purchaser who claims that he did not purchase the car for use in this State to overcome this presumption by satisfactory evidence such as affidavits, travel orders, or changes of assignment of duties that will reasonable establish that at the time of purchase the purchaser did not intend to use the car in this State.

A--- C--- of S--- C---

-2-

March 31, 1950
570.0940

This office is glad to be of assistance in doubtful cases in determining whether or not the tax is applicable. It is suggested that a full statement of the facts and circumstances be submitted on the basis of which we can make our determination. Very truly yours,

E. H. Stetson
Tax Counsel

EHS:ph
cc:

Mr. W. C. Shay