Laws, Regulations & Annotations

Business Taxes Law Guide – Revision 2013
 

Sales and Use Tax Annotations


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L

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

Annotation 330.5050

(e) SALES AND LEASEBACK TRANSACTIONS

330.5050 90-Day Rule. A taxpayer purchased fixed assets without payment of tax or tax reimbursement. The assets were placed in the taxpayer's stores and were functionally used. More than 90 days later the property was sold to a leasing company and leased back. Tax was paid on the lease payments.

Tax is also due on the acquisition cost of the equipment. In order to avoid tax on both acquisition cost and lease payments, tax must be paid on the cost and the sale/leaseback transaction must be completed within 90 days. 1/5/95.