California Code of Regulations › Title 18 - Public Revenues › Division 2 - California Department of Tax and Fee Administration- Business Taxes (State Board of Equalization- Business Taxes, See Ch. 6 and 9.9) › Chapter 4 - Sales and Use Tax › Article 16 - Resale Certificates; Demonstration; Gifts and Promotions › Section 1667 - Exemption Certificates

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(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.