Laws, Regulations & Annotations
Business Taxes Law Guide – Revision 2017
Sales and Use Tax Annotations
395.0000 OCCASIONAL SALES—SALE OF A BUSINESS—BUSINESS REORGANIZATION—Regulation 1595
(a) IN GENERAL
395.0013.250 Excess Furniture and Equipment. A new business in California that designs, manufactures, and sells satellite television integrated receivers and decoders purchased furniture and equipment tax paid for use in business operations. Due to unforeseen market changes and difficulty in obtaining highly skilled personnel, the business needs to reorganize and dispose of some of the excess furniture and equipment 60 days after the start of business. The business is of the opinion that the sale is exempt from tax as an occasional sale since the business operations consist of designing, manufacturing, and selling satellite television integrated receiver and decoder systems and not in selling furniture and equipment.
The sale of the excess furniture and equipment will not qualify as an occasional sale. Since the business operations include selling the merchandise they design and manufacture, the business would be required to hold a seller's permit. Since the furniture and equipment is used in the business operations that require the holding of a seller's permit, the sale would not qualify as an occasional sale. If the sale of the furniture and equipment is at retail, it is subject to sales tax. 11/12/97. (M99–1).