Laws, Regulations & Annotations

Business Taxes Law Guide – Revision 2014
 

Sales and Use Tax Annotations


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L

330.0000 LEASES OF TANGIBLE PERSONAL PROPERTY—IN GENERAL—Regulation 1660

Annotation 330.2022

(a) IN GENERAL

330.2022 Change to Tax-Paid Status. Company A and Company B are both in the business of leasing equipment in substantially the same form as acquired to the general public. Both companies are owned by Company C. Company A purchased its equipment ex-tax and has been reporting and paying tax on the rental receipts. It now finds this arrangement undesirable and wishes to convert to tax-paid status. It sells all of its equipment to Company B in a taxable sale at fair market value and collects and pays sales tax reimbursement on the transaction. It then leases the equipment back from Company B, which has no liability on this lease because the equipment is now tax-paid and being leased in the same form as acquired. The subsequent sub-lease by Company A to the general public is also not subject to tax for the same reason. 11/22/83.