California Clarifies Partial Exemption for Manufacturing and Research Equipment
- Oct 2, 2014 | Gail Cole
California State Board of Equalization has now adopted a new regulation that raises awareness and provides guidance on the implementation and interpretation of that partial exemption.
- Prescribes “the form of the partial exemption certificate that the purchaser is statutorily required to furnish to the retailer.”
- Prescribes “the circumstances under which a retailer may accept such a partial exemption certificate in good faith for purposes of relieving the retailer of liability for the sales tax or the duty of collecting the use tax from the purchaser.”
- Provides a definition for the phrase “primarily engaged.”
- Explains the meaning of the phrase “special purpose buildings and foundations.”
- Clarifies how the partial exemption applies in the context of lease transactions and construction contracts.
The approved regulation takes effect September 25, 2014. On that date, its provisions become retroactively effective on July 1, 2014, the date the partial exemption took effect.
Automated sales tax software helps businesses manage sales tax exemptions, both partial and complete. Learn more.