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  • A reservation, including rights-of-way and easements running through a reservation;

  • A rancheria; and

  • Any land held by the United States in trust for any Indian tribe or Indian individual (also known as “trust land”).

Please note: Not all portions of a facility housing an Indian gaming establishment may be located in Indian coun- try. For example, some portions of a facility containing a gaming establishment (like a parking lot) may be located on land adjacent to Indian country. Transactions occurring on land adjacent to Indian country may not meet the exemption requirements.

Exemption certicate

The Sales and Use Tax Law presumes that all gross receipts are subject to tax until the contrary is established. This presumption may be overcome by the seller timely obtaining an exemption certificate from the purchaser.

An exemption certificate is any written document that includes the following:

  • Date;

  • Signature of the purchaser, purchaser’s agent, or the purchaser’s employee;

  • Name and address of the purchaser;

  • Seller’s permit number, or if the purchaser is not required to hold a seller’s permit, a notation to that effect and the reason;

  • Description of the property purchased under the certificate; and

  • Statement of the manner in which or the purpose for which the property will be used so as to make the sales and/or use tax inapplicable to the sale.

Please see Documenting Exempt Transactions for more information regarding documenting exempt transactions. Additionally, sample exemption certificates are contained at the end of this publication.

Sales tax and use tax: what’s the dierence? Sales tax

California sales tax generally applies to the retail sale in California of tangible personal property (for example, physi- cal items) such as goods, merchandise, vehicles, vessels, aircraft, and other physical products. Sales are taxable unless they are specifically exempt or excluded by law. As noted in the Preface there is no general exemption from the sales tax for sales to Indians.

If you make retail sales of tangible personal property in this state, you are required to hold a California seller’s permit. This is true even when most or all of your sales are not taxable, or qualify as exempt. (Exception: You are not required to hold a seller’s permit if all of your sales are made exclusively in interstate or foreign commerce or if you are an Indian retailer making sales only in Indian country.) For more information, see publication 107, Do You Need a California Seller’s Permit?

Use tax

California use tax generally applies to the storage, use, or other consumption of tangible personal property in California. California use tax is a companion to the sales tax. Persons or businesses generally owe use tax when they use, store, give away, or consume physical products in California if they did not pay California sales tax on their pur- chase. Use tax generally applies to untaxed purchases made from out-of-state sellers. It may also apply to certain untaxed purchases made in Indian country. The use tax rate for a California location is the same as the sales tax rate.

Retailers who are required to collect use tax, but not pay sales tax, are required to hold a Certificate of Registration

  • Use Tax. You can register on our website at www.boe.ca.gov, by selecting New Registration, and then select Reg-

ister a business activity with BOE. You can also register to report use tax in person at any of our field offices. Please contact our Customer Service Center for assistance at 1-800-400-7115 (TTY:711).



APRIL 2014

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