Laws, Regulations & Annotations

Business Taxes Law Guide – Revision 2018

Sales and Use Tax Annotations

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135.0000 BANKS AND INSURANCE COMPANIES—Regulation 1567

Annotation 135.0310

135.0310 Occasional Sales—Insurance Company. The sale of a pre-written computer program, originally developed by an insurance holding company for its own use, does not qualify for the sales tax exemption as a sale by an insurance company since a holding company does not pay the "in lieu" gross premiums tax. The sale may, however, be exempt as an "occasional sale" if the seller has not made three or more sales of substantial amounts or a substantial number of sales in small amounts in a twelve month period. In determining if this test is met, all sales of tangible personal property must be considered, including sales to related or subsidiary companies. If this sale does not meet the "number of sales" test, it is still possible that tax might apply if the holding company is actively seeking to promote additional sales of the program. This promotion would make the holding company a "seller" pursuant to section 6014 of the Revenue and Taxation Code and preclude the Occasional Sale exemption. 9/22/93.