Sales Tax Presumptions

Division 2, Part 1, Chapter 2, Article 3 deals with presumptions and resale certificates under the California Sales Tax Law.

Section 6091 provides that it is presumed that all gross receipts are subject to the tax until the contrary is established. The burden of proving that a sale of tangible personal property is not a sale at retail is upon the person who makes the sale unless he takes from the purchaser a certificate to the effect that the property is purchased for resale.

Section 6092 specifies that the certificate relieves the seller from liability for sales tax only if taken in good faith from a person who is engaged in the business of selling tangible personal property and who holds the permit provided for in Article 2 (commencing with Section 6066) of this chapter.

Section 6092.1 states that any person, other than a person exempt from payment of use tax, who leases mobile transportation equipment and who cannot otherwise properly issue a resale certificate may issue a certificate for the limited purpose of reporting his use tax liability based on fair rental value.

Section 6092.5 says that every qualified person making any sale of a mobilehome or commercial coach required to be registered annually under the Health and Safety Code, or of a vehicle required to be registered under the Vehicle Code is presumed to be making a sale at retail and not a sale for resale. The presumption may be rebutted by taking a resale certificate from any of the three specified persons.  A qualified person cannot accept a resale certificate from any person.

Section 6093 requires the certificate to be signed by and bear the name and address of the purchaser, indicate the number of the permit issued to the purchaser, and indicate the general character of the tangible personal property sold by the purchaser in the regular course of business.

Section 6094 provides that, if a purchaser who gives a resale certificate makes any use of the property other than retention, demonstration, or display while holding it for sale in the regular course of business, the use is taxable to the purchaser as of the time the property is first used by him, and, except as provided, the sales price of the property to him is the measure of the tax.

If theuse is limited to the loan of the property to customers as an accommodation while awaiting delivery of property purchased or leased from the lender or while property is being repaired for customers by the lender, the measure of the tax is the fair rental value of the property for the duration of each loan made. If the property is used frequently for purposes of demonstration or display while holding it for sale in the regular course of business and is used partly for other purposes, the measure of the tax is the fair rental value of the property for the period of such other use or uses.

Section 6094.1 provides that, if a purchaser acquires property and leases the property, the purchaser may elect at the time the property is first leased by him, after the effective date of this section, to pay use tax measured by the purchase price of the property. The purchaser must include a transferee who acquires property in a transaction which qualifies, the purchase price of the transferee is the same as that paid by the original purchaser.

Section 6094.5 states that any person, including any officer or employee of a corporation, who gives a resale certificate for property which he or she knows at the time of purchase is not to be resold by him or her or the corporation in the regular course of business for the purpose of evading payment to the seller of the amount of the tax applicable to the transaction is guilty of a misdemeanor.

Section 6095 says that, if a purchaser gives a certificate with respect to the purchase of fungible goods, or purchases those goods for resale in the regular course of business, and thereafter commingles these goods with other fungible goods not so purchased but of such similarity that the identity of the constituent goods in the commingled mass cannot be determined, sales from the mass of commingled goods are deemed to be sales of the goods so purchased until a quantity of commingled goods equal to the quantity of purchased goods so commingled has been sold.