Storage Container Rental Company Wins Use-Tax Case in California

Tanks leased to out-of-state customers for storing hazardous materials aren’t “mobile transportation equipment” subject to California use tax, the California Office of Tax Appeals ruled.

The large and small tanks Adler Tank Rentals LLC leases out are instead tangible personal property, to which use tax doesn’t apply for leases outside the state, a three-judge panel said in a proposed precedential opinion posted Monday.

The ruling means the company is off the hook for $175,000 plus interest that the California Department of Tax and Fee Administration imposed for July 1, 2010, through Dec. 31, 2013.

Under California law, ...