Laws, Regulations & Annotations

Business Taxes Law Guide – Revision 2013
 

Sales And Use Tax Law

ANALYSIS OF THE UNIFORM LOCAL SALES AND USE TAX LAW

(Hereinafter called the "Uniform Law")

Authorization to impose tax. Counties are authorized to impose a sales tax and use tax, in accordance with the provisions of the Uniform Law. (As of October 1, 1967, all counties have adopted ordinances under the terms of this law.)

Rate of tax. The rate of the sales tax and the use tax is fixed at 1¼ percent through July 1, 2004, and 1 percent thereafter of the sales price of tangible personal property sold at retail in the county, or purchased outside the county for use in the county unless the sale is subject to a local tax under an ordinance conforming to the Uniform Law.

Provisions of State Sales and Use Tax Law incorporated. The ordinance imposing the tax must include provisions identical to those of the State Sales and Use Tax Law with certain exceptions, which include the rate of tax and the substitution of the name of the county as the taxing agency in place of the state.

Administration. The county is required to contract with the State Board of Equalization to perform all functions in the administration and operation of the ordinance imposing the tax.

Disposition of proceeds. All taxes collected by the board under contract with counties and cities shall be transmitted to the counties and cities.

Presumption—place of sale. The Uniform Law provides that all retail sales are made at the place of business of the retailer unless the property is delivered by the retailer, his agent, or by common carrier to an out-of-state destination.

Regulation 1802, Place of Sale, is set forth in full below:

For the purposes of the Bradley-Burns Uniform Local Sales and Use Tax Law, all retail sales occur at the place of business of the retailer unless the tangible personal property sold is delivered by the retailer or his agent to an out-of-state destination, or to a common carrier for delivery to an out-of-state destination.

It is immaterial that title to the tangible personal property sold passes to the purchaser at a place outside of the local taxing jurisdiction in which the retailer's place of business is located, or that the property sold is never within the local taxing jurisdiction in which the retailer's place of business is located.

As provided in the law, the gross receipts from sales of tangible personal property subject to the local tax shall include delivery charges, when such charges are subject to the state sales or use tax.

If a seller has more than one location for which sellers' permits are required, and if two or more of such locations participate in the sale, the sale occurs at the place of business where the principal negotiations are carried on. If this place is the place where the order is taken, it is immaterial that the order must be forwarded for acceptance, approval of credit, shipment, or billing. For the purposes of this rule, an employee's activities will be attributed to the place of business out of which he works.

City tax—offset. Persons are entitled to credit against the county tax the amount of any city sales or use tax due under a city ordinance which provides for a sales and use tax of 0.75 percent or less, contains provisions similar to those required to be contained in the county ordinance respecting inclusion of the provisions of the State Sales and Use Tax Law, contracting with the State Board of Equalization for administration and operation of the city ordinance, and the exemptions hereinafter mentioned.

Redevelopment agency tax —offset. Persons may be entitled to credit against the city tax the amount of sales and use taxes due to a redevelopment agency of such city.

Exemptions:

1. Tax paid elsewhere. The sale or use of property is exempted, if the sale price or cost of the property has been subject to a sales or use tax of another city, county, or city and county under an ordinance enacted in accordance with the Uniform Law.

2. Waterborne vessels and aircraft common carriers. Redevelopment agency sales tax, city sales tax, and 1 percent of the 1¼ percent county sales tax does not apply to sales of property to operators of aircraft when the property is to be used or consumed principally outside the city or county of sale and directly and exclusively in the carriage of persons or property for commercial purposes or directly and exclusively in the use of the aircraft as common carriers of persons or property under the authority of the laws of California, the United States, or any foreign government. Whether or not the property is principally used outside the redevelopment agency, city or county of sale, the redevelopment agency use tax, the city use tax, and 0.75 percent of the 1¼ percent county use tax does not apply when property purchased by operators of aircraft is used or consumed by them directly and exclusively in the carriage of persons or property for commercial purposes or directly and exclusively in the use of the aircraft as common carriers of persons or property under authority of the laws of California, the United States, or any foreign government.

3. State exemptions incorporated. Exemptions contained in State Sales and Use Tax Law are incorporated into the local sales and use tax ordinances with the exception of the sale or use of property purchased by certain new businesses for use in manufacturing and related activities. Such sales or uses are subject to the local tax.