Ezel / Tax Rulings / CA

Did California plates make an out-of-state-delivered car taxable when it was not used in California?

Short answer No. But the dealer needed records—or a buyer affidavit—proving out-of-state delivery and use because California registration invited audit scrutiny.
State
CA
Ruling
Annotation 580.0400
Tax type
Sales and Use Tax
Issued
1953-08-31
Issued by
California State Board of Equalization
Requested by
An automobile seller asking about factory delivery and California registration for cars used outside the state
Topics
factory delivery out of state use california registration license plates audit records purchaser affidavits sales tax use tax
Source
View Original PDF

Apply this to your situation

This page answers the general question as of 1953. Ask about yours and see what current California tax law says, with citations.

Currency note: this ruling is from 1953
Subsequent statutory amendments, regulation changes, court decisions, or later rulings may have changed the analysis. Treat this page as historical context, not current tax advice. Verify current law before relying on any specific rule, rate, or position mentioned here.
Disclaimer: This is an August 31, 1953 California State Board of Equalization tax-counsel letter about a factory-delivered automobile not used in California despite California registration. Its result depended on both the sale and intended use occurring outside the state and on records or an affidavit supporting those facts. Current vehicle-registration, delivery, documentation, sales-tax, and use-tax rules may differ. This summary is informational only and is not legal or tax advice.
About this page: The plain-English summary, reader guidance, and Q&A below were written by Ezel based on the official state tax ruling. The original ruling (linked on this page as a PDF) is the authoritative source for any reliance.
View original ruling (PDF)

Plain-English summary

Neither sales tax nor use tax applied when the buyer took factory delivery outside California and did not use the automobile in California. The sale occurred elsewhere, and the car was not bought for California use.

California license plates did not change that answer. They did make documentation especially important: the dealer needed records proving out-of-state delivery and use and, if the ordinary transaction records were unclear, should obtain the purchaser's affidavit stating the facts.

Citations and references

  • California sales- and use-tax principles for place of sale and intended use (stated without section numbers in the source)

Source

Original ruling text

580.0400

PLEASE RETURN TO
LEGAL FILES

SEP 1 1953
AUGUST 3 1, 1953

Gentlemen:
In answer to your letter of August 10 we advise that neither sales tax nor use tax applies with respect to the sale of an automobile to a purchaser who takes delivery at the factory outside this State and who does not use the car in this State. As the sale takes place outside the State, the sales tax is inapplicable, and as the cars are not bought for use in this State, the use tax is inapplicable. It is immaterial that the customer may secure California plates. The fact of California registration, however, makes it urgent that you retain sufficient records to show, in case of an audit, that the car was in fact delivered outside the State and was bought for use outside the State. If the fact of use outside the State is not clearly apparent from the normal records of the transaction, it would be advisable to secure an affidavit from the purchaser setting forth the facts. Very truly yours,

E. H. Stetson
Tax Counsel
cc: San Jose - Compliance

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