Laws, Regulations & Annotations

Business Taxes Law Guide – Revision 2018

Sales and Use Tax Annotations

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Annotation 395.0066


395.0066 Sale of Branch Thrift. Corporation A is in the business of taking deposits and loaning money. It also acquired through assignments all rights, title, and interest to office and shop equipment lease contracts from various leasing companies. All of the items under lease were acquired tax paid at the time of the original lease. Some contracts were acquired by Corporation A at the time of the original lease, others were acquired some months later. These assignments were "sales" and were subject to tax at the time of assignment. Corporation A also sold checks to its depositors.

In December 1983, Corporation A sold an undivided 80% interest in these lease contracts to an out-of-state firm. A security interest was granted to the buyer in the remaining 20%. On the same date, it sold a branch office to a California firm. The assets transferred were the lease of the premises, certificate loans, all rights, title and interest in lease contracts similar to those sold to the out-of-state firm, leasehold improvements, and furniture and fixtures. In addition to the forgoing transaction, Corporation A entered into numerous automobile leases which were "sales."

The corporation's leasing and check sales activities are not activities separate from its loan and depository activities. The sale of the tangible personal property used in the operation of the branch office is subject to tax. Also , the sale of the undivided interest in lease contracts was a sale subject to tax to the extent the leased property was located in California. 8/16/84.