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
(f) SALE OF A BUSINESS GENERALLY
395.1245 Sale of Furniture and Fixtures. Company A entered into an agreement to sell its business, fixtures, and liquor license to Company B. Company B placed $10,000 in escrow, took possession of the premises, and had the liquor license transferred to it pursuant to an agreement that company A would obtain the consent of the mortgagee of the equipment. Company B operated the business for one month but because of A's failure to obtain the consent of the mortgagee, B ceased operations and abandoned the premises. The liquor license was deposited with the Department of Alcoholic Beverage Control for transfer back to A.
The Board has taken the position that when intended purchasers deposit a part of the purchase price in escrow, agree to pay the balance, take possession of the premises, and begin active conduct of the business, a sale has taken place. In view of the above, in this case, a sale has taken place. The sale of the tangible personal property of the business is subject to tax. 9/10/65.