(a) In General. The law provides that for the
purpose of the proper administration of the sales and use tax and to prevent
evasion of the sales tax it shall be presumed that all gross receipts are
subject to the tax until the contrary is established.
This presumption may be rebutted by the seller as to any
sale by establishing to the satisfaction of the Board that the gross receipts
from the sale are not subject to the tax or by timely taking a resale
certificate as provided in Regulation 1668 or by taking a certificate as
provided in this regulation.
(b) Effect.
(1) Except as stated hereinafter, a seller is
relieved of the liability for sales tax if the purchaser timely certifies in
writing to the seller that the property will be used in a manner or for a
purpose entitling the seller to regard the gross receipts from the sale to be
exempted from the sales tax by one or more of the provisions of Chapter 4
(commencing with Section 6351) of the Sales and Use Tax Law. A certificate will
be considered timely if it is given at any time before the seller bills the
purchaser for the property, or any time within the seller's normal billing and
payment cycle, or any time at or prior to delivery of the property to the
purchaser.
The certificate shall relieve the seller from liability for
the sales tax only if it is taken in good faith.
Invoices on sales claimed by a seller as exempt should
specify the names of the purchasers in order to relate them to exemption
certificates.
(2) Effective
January 1, 1990, a certificate of exemption from the sales tax for the sale of
tangible personal property, other than fuel or petroleum products, to a foreign
air carrier need not be received timely. A seller will be allowed 45 days from
the date of the Board's written request to obtain an exemption certificate from
the purchasing foreign air carrier as provided in Regulation 1621(c)(2),
18 CCR
1621.
(3) If a purchaser certifies in writing to a
seller that the property purchased will be used in a manner or for a purpose
entitling the seller to regard the gross receipts from the sale as exempt from
the sales tax and uses the property in some other manner or for some other
purpose, the purchaser shall be liable for payment of sales tax as if the
purchaser were a retailer making a retail sale of the property at the time of
such use and the sales price of the property to the purchaser shall be deemed
the gross receipts from such retail sale.
The term "use" is the same as defined in Section 6009 of
the Sales and Use Tax Law without the exclusion defined in Section
6009.1.
(c)
Issuance of Certificate.
(1) Form of
Certificates. Certain other regulations prescribe the form of exemption
certificates to be used with respect to several specific kinds of transactions.
Where no specific form of certificate is prescribed, the certification must be
in writing and include the date; the signature of the purchaser, the
purchaser's agent, or the purchaser's employee; the name and address of the
purchaser; the number of the purchaser's seller's permit, or if the purchaser
is not required to hold a seller's permit, a notation to that effect and the
reason; a description of the property purchased under the certificate; and a
statement of the manner in which or the purpose for which the property will be
used so as to make the sales tax inapplicable to the sale.
To relieve the seller from liability for the sales tax, the
statement of the manner in which or the purpose for which the property will be
used must be one which under the provisions of Chapter 4 (commencing with
Section 6351) of the Sales and Use Tax Law does entitle the seller to regard
the gross receipts from the sale as exempted from the sales
tax.
(2) Issuance of
Certificates Where Not Appropriate. There are several cases in which
certification will not relieve the seller of liability for the sales tax. In
such cases, an exemption certificate should not be obtained but rather the
facts and documentation of the transaction must support the exemption. For
example, a certification to the effect that sales tax does not apply because
the property purchased will be exported and shipped out of state, does not
relieve the seller of liability for the sales tax. A sale is exempt from sales
tax as a sale in interstate or foreign commerce only if the conditions set
forth in Regulation 1620 are met, and the seller should obtain the
documentation required by that regulation in order to support the
exemption.
Notes
Cal. Code
Regs. Tit. 18, §
1667
1. New
section filed 4-15-77; effective thirtieth day thereafter (Register 77, No.
16).
2. Amendment of subsection (b) filed 12-20-77; effective
thirtieth day thereafter (Register 77, No. 52).
3. Editorial
correction of printing error in subsections (b) and (c) (Register 91, No.
45).
4. Amendment of subsections (a), (b) and (c), repealer of
subsection (d) and NOTE filed 9-19-91; operative 10-21-91 (Register 92, No.
2).
5. Editorial correction of printing error in subsection (b)(1)
(Register 92, No. 24).
Note: Authority cited: Section
7051,
Revenue and Taxation Code. Reference: Sections
6385
and
6421,
Revenue and Taxation Code.
1. New section filed
4-15-77; effective thirtieth day thereafter (Register 77, No. 16).
2. Amendment of subsection (b) filed 12-20-77; effective thirtieth day
thereafter (Register 77, No. 52).
3. Editorial correction of
printing error in subsections (b) and (c) (Register 91, No. 45).
4.
Amendment of subsections (a), (b) and (c), repealer of subsection (d) and Note
filed 9-19-91; operative 10-21-91 (Register 92, No. 2).
5.
Editorial correction of printing error in subsection (b)(1) (Register 92, No.
24).
