Could a taxpayer offset California vehicle use tax with properly due use tax from an earlier use in another state?

Plain-English summary

California allowed the taxpayer to offset its California vehicle use tax with the use tax properly due to another state.

The other state assessed use tax after an audit because the taxpayer had made a taxable use of the vehicle there before bringing it to California. The vehicle then entered California within 90 days of purchase and was substantially used here, creating California use-tax liability as well.

After review confirmed that the other state's tax was properly due and would be paid, the memorandum concluded that section 6406 applied and the taxpayer should receive the offset.

Common questions

Was merely receiving an out-of-state assessment enough?

No. The memorandum relied on the review's conclusion that the other-state tax was properly due and would be paid.

Which state's tax was credited?

The published memorandum redacts the state's name.

Citations and references

• Cal. Rev. & Tax. Code § 6406 — offset for properly due prior other-state tax applied

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/570-1625.pdf

Original ruling text

State of California

Board of Equalization

Memorandum

To:

Audit Review and Refund (GMD)

From:

Tax Counsel (GLR) - Headquarters

Subject:

S--- F--- T--- T--- Co.

570.1625

April 24, 1972

SY -- XX XXXXXX

In your memorandum of March 2, 1972 you ask whether the taxpayer under the circumstances set forth below is entitled to the offset provided in Section 6406. We understand that use tax was assessed by the State of --- as a result of an audit on the basis that a taxable use had been made of the vehicle by the taxpayer in --- prior to bringing it to California. Since the vehicle entered the state within ninety days from the date of purchase and was substantially used thereafter in California, it was concluded that the vehicle was also subject to California use tax. Upon review, it was concluded that the --- tax was properly due and will be paid. Under these circumstances, it is our opinion that Section 6406 is applicable and the offset provided therein should be granted to the taxpayer.

GLR:lb

cc:

Out-of-State
---