Laws, Regulations & Annotations
Business Taxes Law Guide – Revision 2016
Sales and Use Tax Annotations
330.0000 LEASES OF TANGIBLE PERSONAL PROPERTY—IN GENERAL—Regulation 1660
(a) IN GENERAL
330.1874 Assignment of Lease. An owner of property sells it and leases it back in a transaction qualifying as an acquisition sale and leaseback under section 6010.65. That person, now a lessee, assigns the lease to a new sub-lessee. If the leaseback portion of the acquisition sale and leaseback transaction is a true lease (as opposed to a sale at inception), then no tax applies to the rentals paid by the sub-lessee and the assignment is not taxable. However, the exercise of an option to purchase the leased property by the sub-lessee would be subject to tax.
On the other hand, if the leaseback portion is a sale at inception, the assignment of the "lease" is actually a sale of the property to the sub-lessee. As such, the assignment/sale is taxable; however, the "lease" receipts paid by the sub-lessee would not taxable. 2/21/92; 4/1/94.