Did California base titling defeat the vehicle exemptions in sections 6388 and 6388.5?

Plain-English summary

California base titling defeated the section 6388 exemption. DMV advised that a California-base-titled vehicle had to be principally dispatched and garaged in California, which conflicted with section 6388's nonresident and outside-use requirements. The memorandum also concluded that maintaining the California garage or dispatch station made the owner a resident for this sales-and-use-tax purpose.

Section 6388.5 worked differently. California base titling did not itself destroy that exemption when the purchaser claimed the vehicle would be used exclusively in interstate or foreign commerce rather than exclusively outside California.

Citations and references

• California Revenue and Taxation Code sections 6388 and 6388.5 (as cited)
• Uniform Vehicle Registration Proration and Reciprocity Agreement (as described by DMV in the source)
• Garrett Corp. v. State Board of Equalization, 189 Cal.App.2d 504 (as cited)

Source

• Annotated Legal Opinions collection: https://cdtfa.ca.gov/taxes-and-fees/annotations-menu.htm
• Annotation page: https://cdtfa.ca.gov/lawguides/vol2/suta/580-0000-all.html
• Original supporting opinion: https://cdtfa.ca.gov/lawguides/annotations/580-0310.pdf

Original ruling text

State of California

Board of Equalization
Legal Division

Memorandum
To

: Occasional Sales (ALC)

From

: Headquarters – Legal (RLD)

580.0310
Date :

December 2, 1981

Subject : Section 6388 and 6388.5

Revenue and Taxation Code

This is in reply to your October 28, 1981 memorandum regarding the application of the sales and use tax exemptions provided by Sections 6388 and 6388.5, Revenue and Taxation Code, to vehicles that are subject to prorate registration in California. You asked, assuming that all other provisions of the exemptions are complied with, whether a vehicle may be “base titled” in California without losing the exemption. We have been advised by the Department of Motor Vehicles that the Uniform Vehicle Registration Proration and Receprocity Agreement, into which California has entered, requires that a vehicle that is “base titled” in California must be principally dispatched and garaged in California. Section 6388 has a requirement that the purchaser furnish an “affidavit attesting that he is not a resident of California and that he purchased such vehicle from a dealer at a specified location without the State for use outside this State”. It does not appear that a vehicle which is base titled in California would be purchased for principal use outside California as required by Section 6388. Further, the court in Garrett Corp. v. State Board of Equalization, 189 Cal.App.2d 504; was faced with determining whether a corporation was a nonresident for purposes of Section 6366, Revenue ad Taxation Code. The court held that the word “resident” in the statute was not limited to a domiciliary concept by contemplated any factual place of abode of some permanency, more than a more temporary sojourn. We believe that a person who maintains a garage or dispatch station in California to qualify for base titling a vehicle is a “resident” for sales and use tax purposes and does not qualify for the exemption provided by Section 6388. The fact that a vehicle is base titled in California will not cause a loss of the exemption provided by Section 6388.5 unless the purchaser is claiming that the vehicle is purchased for use “exclusively outside this state”. We hope this answers your questions. If you need further information, feel free to write again.