2005 California Revenue and Taxation Code Sections 6381-6396 Article 2. Exemptions From Sales Tax

6381.  There are exempted from the computation of the amount of the
sales tax the gross receipts from the sale of any tangible personal
property to:
   (a) The United States, its unincorporated agencies and
instrumentalities;
   (b) Any incorporated agency or instrumentality of the United
States wholly owned by the United States or by a corporation wholly
owned by the United States;
   (c) The American National Red Cross, its chapters and branches.
6384.  Notwithstanding any other provision of law the tax imposed
under this part shall apply to the gross receipts from the sale of
any tangible personal property to contractors purchasing such
property either as the agents of the United States or for their own
account and subsequent resale to the United States for use in the
performance of contracts with the United States for the construction
of improvements on or to real property in this State.
6385.  (a) There are exempted from the computation of the amount of
the sales tax the gross receipts from the sale of tangible personal
property, other than fuel and petroleum products, to a common
carrier, shipped by the seller via the purchasing carrier's
facilities under a bill of lading whether the freight is paid in
advance, or the shipment is made freight charges collect, to a point
outside this state and the property is actually transported to the
out-of-state destination for use by the carrier in the conduct of its
business as a common carrier.
   (b) There are exempted from the computation of the amount of the
sales tax the gross receipts from the sale of tangible personal
property, other than aircraft fuel and petroleum products, purchased
by a foreign air carrier and transported by the foreign air carrier's
facilities to a foreign destination for use by the air carrier in
the conduct of its business as a common carrier by air of persons or
property.  To qualify for this exemption, the foreign air carrier
shall furnish to the seller a certificate in writing that the
property shall be transported and used in the manner required in this
subdivision.  The certificate shall be substantially in the form
prescribed by the board.  A seller is not liable for the sales tax if
the seller accepts the certificate in good faith.  If the seller
does not have the certificate at the time the board requests the
seller to submit the certificate to the board, the seller shall be
given a reasonable time to request the foreign air carrier to provide
the seller with the certificate.  The foreign air carrier shall
maintain records in this state, such as a copy of a bill of lading,
an air waybill, or cargo manifest, documenting its transportation of
the tangible personal property to a foreign destination.
   (c) There are exempted from the computation of the amount of the
sales tax the gross receipts from the sale of fuel and petroleum
products to a water common carrier, for immediate shipment outside
this state for consumption in the conduct of its business as a common
carrier after the first out-of-state destination. To qualify for the
exemption the common carrier shall furnish to the seller an
exemption certificate in writing stating the quantity of fuel and
petroleum products claimed as exempt which is to be consumed after
reaching the first out-of-state destination.  That certificate shall
bear the purchaser's valid seller's permit number or valid fuel
exemption registration number and shall be substantially in the form
prescribed by the board. Acceptance in good faith of that certificate
shall relieve the seller from liability for the sales tax.
   (d) "First out-of-state destination," as used in this section,
means the first point reached outside this state by a common carrier
in the conduct of its business as a common carrier at which cargo or
passengers are loaded or discharged, cargo containers are added or
removed, fuel is bunkered, or docking fees are charged.  "First
out-of-state destination," as used in this section, also includes the
entry point of the Panama Canal when the carrier is only transiting
the canal in the conduct of its business as a common carrier.
   (e) "Common carrier," as used in this section, with respect to
water transportation, shall be deemed to include any vessel engaged,
for compensation, in transporting persons or property in interstate
or foreign commerce.
   (f) "Foreign air carrier," as used in this section, means a
foreign air carrier as defined in Section 40102 of Title 49 of the
United States Code.
   (g) "Immediate shipment," as used in this section, means that the
delivery of the fuel and petroleum products by the seller is directly
into a ship for transportation outside this state and not for
storage by the purchaser or any third party.
   (h) Any common carrier claiming exemption under subdivision (c)
who is not required to hold a valid seller's permit shall be required
to register with the board and obtain a fuel exemption registration
number and shall be required to file returns as the board may
prescribe if either the board notifies the carrier that returns must
be filed or the carrier is liable for taxes based upon consumption of
fuel erroneously claimed as exempt under this section.  A common
carrier required to hold a fuel exemption registration number shall
be subject to all applicable provisions of this part, Part 1.5
(commencing with Section 7200), and Part 1.6 (commencing with Section
7251).
   (i) A common carrier claiming an exemption under subdivision (c),
upon request, shall make available to the board records, including,
but not limited to, a copy of a log abstract or a cargo manifest,
documenting its transportation of the fuel or petroleum product to an
out-of-state destination and the amount claimed as exempt. If the
carrier fails to provide these records upon request, the board may
revoke the carrier's fuel exemption registration number.
   (j) The board may require any carrier claiming an exemption under
this section and required to obtain a fuel exemption registration
number to place with it that security as the board may determine
pursuant to Section 6701.
   (k) Pursuant to subdivisions (a), (b), and (c), any use of the
property by the purchasing carrier, other than that incident to the
delivery of the property to the carrier and the transportation of the
property by the carrier to the first out-of-state destination and
subsequent use in the conduct of its business as a common carrier, or
a failure of the carrier to document its transporting the property
to the first out-of-state destination, shall subject the carrier to
liability for payment of sales tax as if it were a retailer making a
retail sale of the property at the time of that use or failure, and
the sales price of the property to it shall be deemed to be the gross
receipts from the retail sale.
   (l) On December 31, 2005, the Legislative Analyst's Office (LAO)
shall submit a report to the Governor and the Legislature that
evaluates the economic impact of the partial sales tax exemption
regarding bunker fuel.
   (m) This section shall remain in effect only until January 1,
2014, and as of that date is repealed.
6385.  (a) There are exempted from the computation of the amount of
the sales tax the gross receipts from the sale of tangible personal
property, other than fuel and petroleum products, to a common
carrier, shipped by the seller via the purchasing carrier's
facilities under a bill of lading whether the freight is paid in
advance, or the shipment is made freight charges collect, to a point
outside this state and the property is actually transported to the
out-of-state destination for use by the carrier in the conduct of its
business as a common carrier.
   (b) There are exempted from the computation of the amount of the
sales tax the gross receipts from the sale of tangible personal
property, other than aircraft fuel and petroleum products, purchased
by a foreign air carrier and transported by the foreign air carrier's
facilities to a foreign destination for use by the air carrier in
the conduct of its business as a common carrier by air of persons or
property.  To qualify for this exemption, the foreign air carrier
shall furnish to the seller a certificate in writing that the
property shall be transported and used in the manner required in this
subdivision.  The certificate shall be substantially in the form
prescribed by the board.  A seller is not liable for the sales tax if
the seller accepts the certificate in good faith.  If the seller
does not have the certificate at the time the board requests the
seller to submit the certificate to the board, the seller shall be
given a reasonable time to request the foreign air carrier to provide
the seller with the certificate.  The foreign air carrier shall
maintain records in this state, such as a copy of a bill of lading,
an air waybill, or cargo manifest, documenting its transportation of
the tangible personal property to a foreign destination.
   (c) "Common carrier," as used in this section, with respect to
water transportation, shall be deemed to include any vessel engaged,
for compensation, in transporting persons or property in interstate
or foreign commerce.
   (d) "Foreign air carrier," as used in this section, means a
foreign air carrier as defined in Section 40102 of Title 49 of the
United States Code.
   (e) Pursuant to subdivisions (a) and (b), any use of the property
by the purchasing carrier, other than that incident to the delivery
of the property to the carrier and the transportation of the property
by the carrier to an out-of-state destination and subsequent use in
the conduct of its business as a common carrier, or a failure of the
carrier to document its transporting the property to an out-of-state
destination, shall subject the carrier to liability for payment of
sales tax as if it were a retailer making a retail sale of the
property at the time of that use or failure, and the sales price of
the property to it shall be deemed to be the gross receipts from the
retail sale.
   (f) This section shall become operative on January 1, 2014.
6386.  There are exempted from the computation of the amount of the
sales tax the gross receipts from the sale in this state of tangible
personal property to a holder of a valid seller's permit issued under
Section 6067 when the property is used by the purchaser outside of
this state in his performance of a contract to improve real property
and, as a result of such use, is incorporated into and becomes a part
of real property located outside of this state.  This exemption
shall apply only if the purchaser certifies in writing to the seller,
in such form as the board may prescribe, that the property will be
used in a manner and for a purpose herein specified.
6387.  There are exempted from the computation of the amount of the
sales tax the gross receipts from sales of tangible personal property
purchased for use solely outside this State and delivered to a
forwarding agent, export packer, or other person engaged in the
business of preparing goods for export or arranging for their
exportation, and actually delivered to a port outside the continental
limits of the United States prior to making any use thereof.
6388.  Where a new or remanufactured truck, truck tractor,
semitrailer, or trailer, any of which has an unladen weight of 6,000
pounds or more, or a new or remanufactured trailer coach or a new or
remanufactured auxiliary dolly, is purchased from a dealer located
outside this state for use without this state and is delivered by the
manufacturer or remanufacturer to the purchaser within this state,
and the purchaser drives or moves the vehicle from the manufacturer's
or remanufacturer's place of business in this state to any point
outside this state within 30 days from and after the date of the
delivery, there are exempted from the taxes imposed by this part the
gross receipts from the sale of and the storage, use or other
consumption of the vehicle within the state, if the purchaser
furnishes the following to the manufacturer or remanufacturer:
   (a) Written evidence of an out-of-state registration for the
vehicle.
   (b) The purchaser's affidavit attesting that he or she is not a
resident of California and that he or she purchased the vehicle from
a dealer at a specified location without the state for use outside
this state.
   (c) The purchaser's affidavit that the vehicle has been moved or
driven to a point outside this state within 30 days of the date of
the delivery of the vehicle to him or her.
6388.3.  The State Board of Equalization shall prepare and
distribute a standard form or forms for the purchaser affidavit
required by Sections 6388 and 6388.5.
6388.5.  Notwithstanding Section 6388, whenever a new or
remanufactured trailer or semitrailer with an unladen weight of 6,000
pounds or more that has been manufactured or remanufactured outside
this state is purchased for use without this state and is delivered
by the manufacturer, remanufacturer, or dealer to the purchaser
within this state, and the purchaser drives or moves the vehicle to
any point outside this state within 30 days from and after the date
of delivery, or whenever a new or remanufactured trailer or
semitrailer with an unladen weight of 6,000 pounds or more that has
been manufactured or remanufactured in this state is purchased for
use without this state and is delivered by the manufacturer,
remanufacturer, or dealer to the purchaser within this state, and the
purchaser drives or moves the vehicle to any point outside this
state within 75 days from and after the date of delivery, there are
exempted from the taxes imposed by Part 1 (commencing with Section
6001), Part 1.5 (commencing with Section 7200), and Part 1.6
(commencing with Section 7251) the gross receipts from the sale of
and the storage, use, or other consumption of the vehicle within the
state, if the purchaser or the purchaser's agent furnishes the
following to the manufacturer, remanufacturer, or dealer:
   (a) (1) Written evidence of an out-of-state license and
registration for the vehicle.
   (2) In cases where the vehicle is subject to the permanent trailer
identification plate program under Section 5014.1 of the Vehicle
Code and is used exclusively in interstate or foreign commerce, or
both, written evidence of the purchaser's or lessee's United States
Department of Transportation number or Single State Registration
System filing may be substituted for the written evidence described
in paragraph (1).
   (b) The purchaser's affidavit attesting that he or she purchased
the vehicle from a dealer at a specified location for use exclusively
outside this state, or exclusively in interstate or foreign
commerce, or both.
   (c) The purchaser's affidavit that the vehicle has been moved or
driven to a point outside this state within the appropriate period of
either 30 days or 75 days of the date of the delivery of the vehicle
to him or her.
6390.  There are exempted from the computation of the amount of the
sales tax the rentals payable under a lease of tangible personal
property (a) when such rentals are required to be included in the
measure of the use tax or (b)  when such property is situated outside
this state.
6391.  There are exempted from the computation of the amount of the
sales tax the rentals payable under a lease of tangible personal
property for any period of time for which the lessor is obligated to
lease the property for an amount fixed by the lease prior to August
1, 1965, and the lessor did not elect under Sections 6094 or 6244 to
pay use tax measured by the amount of the rental charge.  The lessor
shall be deemed not to be obligated for any period of time for which
he has the unconditional right to terminate the lease upon notice,
whether or not the right is exercised.
6396.  There are exempted from the computation of the amount of the
sales tax the gross receipts from the sale of tangible personal
property which, pursuant to the contract of sale, is required to be
shipped and is shipped to a point outside this state by the retailer
by means of:  (a) facilities operated by the retailer, or (b)
delivery by the retailer to a carrier, customs broker or forwarding
agent, whether hired by the purchaser or not, for shipment to such
out-of-state point.
   For purposes of this section, the term "carrier" shall mean a
person or firm engaged in the business of transporting for
compensation tangible personal property owned by other persons, and
includes both common and contract carriers.  The term "forwarding
agent" shall mean a person or firm engaged in the business of
preparing property for shipment or arranging for its shipment.