Was brief California retention taxable when a purchased building was dismantled and moved to Arizona within about 60 hours?

Plain-English summary

A taxpayer bought a removable building from the Public Housing Administration in San Diego and received a use-tax determination. He said the building was dismantled and moved to Lake Mohave, Arizona, within 60 hours of purchase.

California said the brief California retention fell within section 6009.1 if the taxpayer moved the building to Arizona for his own use there, or if he sold it and title passed outside California.

The memorandum did not accept those facts without verification. It directed the audit office to investigate and determine whether the building was actually purchased and used in the described way.

Common questions

Did the memorandum finally cancel the determination?

No. Its no-tax conclusion was conditional on the audit confirming the taxpayer's facts.

What two out-of-state outcomes could qualify?

The taxpayer's own Arizona use, or an out-of-state sale with title passing outside California.

Citations and references

• Cal. Rev. & Tax. Code § 6009.1 — exclusion for retention solely to transport property outside California for sole use there

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/570-1100.pdf

Original ruling text

State of California
Board of Equalization

Memorandum
570.1100

To: San Diego - Auditing July 24, 1957

From: Headquarters - Tax Counsel (WWM:GAT)

Subject: W. P. W---
XXXX --- Lane
--- ---, CA

It is our understanding, based on statements of taxpayer, and the Report of Field Audit, that taxpayer purchased a building, for removal, from the Public Housing Administration in San Diego. He received a notice of determination informing him that he owed use tax.

According to his letter of July 1, 1956, the building was dismentled and moved outside this state within 60 hours of purchase from the Public Housing Administration and it was moved to Lake Mohave, Arizona. He states that the foregoing can be confirmed by C--- E. R---, Superintendent, L--- M--- National Recreation Area, --- ---, N---.

Under Section 6009.1 of the Sales and Use Tax Law, taxable “storage” and “use” do not include the keeping, retaining or exercising of any right or power over tangible personal property for the purpose of subsequently transporting it outside the state for use solely outside the state.

If taxpayer moved the building to Arizona for his own use there or if he sold it and title passed outside this state, his retention of the property in this state comes within the terms of Section 6009.1 and is not subject to use tax.

Please investigate and determine if the building in question was purchased and used in the manner described.

Enclosed is a copy of taxpayer’s letter to this office for your information.

GAT:rc
Enclosure