Laws, Regulations & Annotations
Business Taxes Law Guide – Revision 2017
Sales and Use Tax Annotations
335.0000 LEASES OF MOBILE TRANSPORTATION EQUIPMENT— Regulation 1661
335.0061 Occasional Sale—Property Acquired Under. The acquisition of tangible personal property in exchange for the first issue of stock of a commencing corporation is not a sale and is not subject to either sales tax or use tax.
The lease of assets so acquired, other than the mobile transportation equipment (MTE) is a continuing sale subject to use tax on the lessee because the lessor did not purchase the property and had no tax liability on its own use of the property. It could not elect to pay tax on "purchase price."
The lease of MTE so acquired is not a continuing sale, but rather a use by the lessor. Since the acquisition was not subject to sales and use tax, there is no liability for the rental of the MTE. 6/6/89.