Laws, Regulations & Annotations

Business Taxes Law Guide – Revision 2013
 

Sales and Use Tax Annotations


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

Annotation 330.5110

(e) SALES AND LEASEBACK TRANSACTIONS

330.5110 Sale and Leaseback. A sale and leaseback agreement will not be treated as a "nonsale" financing transaction where the lease contains a provision that entitles the purchaser/lessor, as owner of the property, to claim depreciation benefits for income tax purposes; a provision allowing the lessee to extend the lease period; and a provision that allows the lessee to purchase the equipment at the end of the lease for the greater of fair market value at the end of the lease or ten-percent of the lessor/purchaser's cost. Either the provision allowing the lessor to claim depreciation or the failure to provide an option to purchase at fair market value or less would preclude the application of Regulation 1660(a)(3)(B). 4/12/90.