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BTLG Table of Contents > Sales and Use Tax Annotations > R > 475.0000 Resale Certificates > Annotation 475.0073

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475.0000 Resale Certificates—Regulation 1668

Annotation 475.0073

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475.0073 Improper Use of Resale Certificate. A taxpayer is engaged in the business of oil exploration, an activity involving the use of a great variety of electronic equipment. The taxpayer gave a resale certificate for the purchase of such equipment and claimed exclusion from the use tax under section 6009.1 because of subsequent shipment and use of the property outside the state. The taxpayer defended the issuance of the certificate on the basis that at the time of purchase it was not known whether any particular item would be resold or used. However, since less than 2% of the purchases were resold, and even these sales were made to related foreign corporations, the argument is specious. The property could not realistically be said to have been purchased for "resale in the regular course of business." Under these circumstances, the issuance of the resale certificate in an attempt to create a use tax exclusion under section 6009.1 is a misuse of the certificate. The purchases are subject to tax. 2/11/72.