Sales Tax on California Leases and Financing Transactions

This article discusses the difference between leases and sales of tangible personal property (property), the rules applied to leases, and how sales tax applies to leases of mobile transportation equipment in California.

A lease is a temporary transfer of possession and control of property for consideration (i.e., something of value, usually money), and the property is later returned to the lessor.  In a sale title to the property is transferred for consideration, so ownership changes and the property is not later returned.

The California State Board of Equalization (Board) has promulgated Regulation 1660, which explains the law as it […]