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BTLG Table of Contents > Sales and Use Tax Annotations > U > 570.0000 Use of Property in State and Use Tax Generally > Annotation 570.1660

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570.0000 Use of Property in State and Use Tax Generally

Annotation 570.1660

(h) Credit for Tax Imposed by Other Jurisdictions

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570.1660 Lessee. Under Nevada law a lessor may elect to pay tax on the purchase or sales price of property intended for leasing and, if the election is made, the subsequent lease receipts will not be subject to tax. If no election is made, the lessor must pay the Nevada tax on the lease receipts and may collect tax reimbursement from the lessee.

A lessee who initially leases tangible personal property in Nevada from a Nevada lessor and who subsequently brings the property into California for use in California must pay California use tax measured by the lease payments due for the billing periods that the property is in California, subject to any applicable Section 6406 credit. If the Nevada lessor did not make any election and the Nevada tax was therefore previously imposed on the lease receipts, the lessee will only be entitled to a credit against the California use tax to the extent that the lessee directly pays, to the lessor or to Nevada, Nevada sales tax or use tax imposed on the same lease payments, or reimbursement therefor. On the other hand, if the lessor elected to pay Nevada tax on the lessor's purchase of the leased property, no amount of credit under Section 6406 is available to the lessee. 7/17/69.