Laws, Regulations & Annotations
Business Taxes Law Guide – Revision 2020
Sales And Use Tax Law
CHAPTER 3. THE USE TAX
Article 1. Imposition of Tax
6201. Imposition and rate of use tax. An excise tax is hereby imposed on the storage, use, or other consumption in this state of tangible personal property purchased from any retailer on or after July 1, 1935, for storage, use, or other consumption in this state at the rate of 3 percent of the sales price of the property, and at the rate of 2½ percent on and after July 1, 1943, and to and including June 30, 1949, and at the rate of 3 percent on and after July 1, 1949, and to and including July 31, 1967, and at the rate of 4 percent on and after August 1, 1967, and to and including June 30, 1972, and at the rate of 3¾ percent on and after July 1, 1972, and to and including June 30, 1973, and at the rate of 4¾ percent on and after July 1, 1973, and to and including September 30, 1973, and at the rate of 3¾ percent on and after October 1, 1973, and to and including March 31, 1974, and at the rate of 4¾ percent thereafter.
History.—Stats. 1943, p. 2919, in effect June 1, 1943, added provision for temporary 2½ percent rate and added provisions for postwar reserve. Temporary reduction and postwar reserve were also provided for by Stats. 1943, p. 1581, in effect May 7, 1943. Stats. 1945, p. 1292, in effect June 5, 1945, continued temporary 2½ percent rate. Stats. 1947, p. 1866, in effect June 17, 1947, continued temporary 2½ percent rate, and deleted provisions for postwar reserve. Stats. 1948, p. 16, in effect April 9, 1948, continued temporary 2½ percent rate. Stats. 1967, p. 2474, operative August 1, 1967, increased the rate to 4 percent. Stats. 1971, p. 2784, operative July 1, 1972, decreased tax rate to 3¾ percent. Stats. 1972, Ch. 1406, effective December 26, 1972, repealed and reenacted the section operative June 1, 1973, increasing the rate to 4¾ percent after May 31, 1973, and repeals this section if the Legislative Analyst does not make the certification described in subdivision (c) of section 316.2 of Ch. 1 of the 1971 First Extraordinary Session. Stats. 1973, Ch. 67, effective May 29, 1973, delayed to July 1, 1973, the rate increase to 4¾ percent; Ch. 296, effective August 23, 1973, decreased the rate to 3¾ percent on October 1, 1973, and raised it to 4¾ percent on March 1, 1974, operative October 1, 1973. Stats. 1991, Ch. 85, in effect June 30, 1991, operative July 1, 1991, added "on and after April 1, 1974, and to and including June 30, 1991, and at the rate of 5 percent" after "March 31, 1974, and at the rate of 4¾ percent". Stats. 1991, Ch. 88, in effect June 30, 1991". Stats. 1991, Ch. 117, in effect July 16, 1991, deleted "on and after April 1, 1974, and to and including July 14,1991, and at the rate of 5 percent" after "March 31, 1974, and at the rate of 4¾ percent."
Constitutionality.—The imposition of the tax upon the use of property after it has been brought into the state does not violate either the Commerce Clause or the Fourteenth Amendment of the Federal Constitution. Felt & Tarrant Manufacturing Co. v. Gallagher (1939) 306 U.S. 62.
Nature of the tax.—The use tax is an excise tax and not a property tax, and therefore the provisions of Article XIII of the State Constitution have no application with respect to it. Douglas Aircraft Co., Inc. v. Johnson (1939) 13 Cal.2d 545.
Temporary use outside the State.—Switch engines purchased outside of California and brought into California within six months of purchase for permanent use therein are subject to use tax even though they were temporarily used outside of California prior to their being brought into the state. Atchison, Topeka and Santa Fe Railway Co. v. State Board of Equalization (1956) 139 Cal.App.2d 411.
Bankruptcy liquidation sale.—Purchaser of tangible personal property from trustee in bankruptcy at liquidation sale is not subject to tax under this section. California State Board of Equalization v. Goggin (1957) 245 F.2d 44, cert. den. (1957) 353 U.S. 961. But see Debtor Reorganizers, Inc. v. State Board of Equalization (1976) 58 Cal.App.3d 691, below.
Contemplated use in California.—Parts and materials are purchased for use in California if at the time of purchase it is contemplated that they might be used anywhere, including California, as the needs of the purchaser might require, and they are in fact used in California. Western Contracting Corp. v. State Board of Equalization (1968) 265 Cal.App.2d 568.
Lease of Property Purchased Ex-Tax from Trustee in Bankruptcy.—The collection of use tax on receipts from leases of property purchased by the lessor from a trustee in bankruptcy does not unlawfully interfere with the process of the bankruptcy court. Debtor Reorganizers, Inc. v. State Board of Equalization (1976) 58 Cal.App.3d 691.
Use tax on railroad passenger cars discriminated against rail carrier.—Federal act prohibited assessment of California use tax on rail passenger cars, where the use tax was not imposed on passenger aircraft and watercraft used by other common carriers in interstate commerce. National Railroad Passenger Corp. v. State Board of Equalization (1986) 652 F.Supp. 923.
Gifts used when delivered to common carrier.-A gift occurs, and California use tax applies, when property is delivered to a common carrier in California for shipment to a donee, whether the donee is inside or outside California. Yamaha Corp. of America v. State Board of Equalization (1999) 73 Cal.App.4th 338.