1. (a) Banks.

   1. (1) Sales by Banks. Sales tax applies to the sale by banks, other than federally-chartered banks exempt from direct state taxation under federal law such as federal reserve banks and federal home loan banks, of tangible personal property sold at retail in this state. [FN1] Use tax applies to the storage, use, or other consumption in this state of tangible personal property purchased at retail from a bank for storage, use, or other consumption in this state, the sale of which is exempt from sales tax. Banks, whether or not exempt from direct state taxation, which are engaged in business in this state and making sales of tangible personal property the storage, use, or other consumption of which is subject to use tax, must collect the tax from the purchaser and pay the amount of tax to the board.
   2. (2) Sales to Banks. Sales tax applies to the sale to banks, other than federally-chartered banks exempt from direct state taxation under federal law, of tangible personal property sold at retail in this state. Banks, other than federally-chartered banks exempt from direct state taxation under federal law, are required to pay use tax to the same extent and in the same manner as other persons storing, using, or otherwise consuming tangible personal property in this state. [FN1] Retailers engaged in business in this state and making sales to banks of tangible personal property the storage, use, or other consumption of which is subject to use tax must collect the tax from the purchaser and pay the amount of the tax to the board.

2. (b) Insurance Companies. Sales tax applies to retail sales in this state to insurance companies. Although sales tax does not apply to sales by insurance companies, they are required to collect use tax from consumers when making sales or leases of tangible personal property, and to pay the amount of the tax to the board to the same extent and in the same manner as other retailers selling or renting tangible personal property for storage, use, or other consumption in this state.

   Use tax does not apply to the storage, use or other consumption in this state by insurance companies of tangible personal property.

Note: Authority cited: Section 7051, Revenue and Taxation Code. Reference: Sections 6203 and 6352, Revenue and Taxation Code. Mutual Life Insurance Co. v. City of Los Angeles (1990) 50 Cal.3d 402.

History

1. Amendment and renumbering of former Section 1991 filed 11-5-69; effective thirtieth day thereafter (Register 69, No. 45).

2. Amendment filed 8-20-76; effective thirtieth day thereafter (Register 76, No. 34).

3. Amendment filed 1-30-80; effective thirtieth day thereafter (Register 80, No. 5).

4. Amendment filed 6-3-83; effective thirtieth day thereafter (Register 83, No. 23).

5. Amendment of subsection (b) and Note filed 12-14-94; operative 1-13-95 (Register 94, No. 50).

[FN1]

Sales and use taxes imposed upon banks with respect to all income years, as defined in Revenue and Taxation Code Section 23042, beginning on and after January 1, 1980.