Laws, Regulations & Annotations

Business Taxes Law Guide – Revision 2014
 

Sales and Use Tax Annotations


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395.0000 OCCASIONAL SALES—SALE OF A BUSINESS—BUSINESS REORGANIZATION—Regulation 1595

Annotation 395.1256

(f) SALE OF A BUSINESS GENERALLY

395.1256 Stipulated Judgment for Rescission. A purchaser of a business entered an action for rescission and restitution and for fraud and general damages based upon alleged misrepresentations as to the anticipated value of business. The seller of the business generally denied the allegations of the complaint and entered into a stipulation for judgment granting rescission to the purchaser, conditioned upon the delivery of title to the property within six months free and clear of liens and encumbrances and other performances. The purchaser was unable to clear all of the outstanding debts and obligations. The seller then undertook payment of the balances owed and resumed possession and operation of the business. The seller ultimately received a bill of sale for the fixtures and equipment.

In this situation, the parties conditionally stipulated judgment for rescission was not carried out according to its precise terms. Nevertheless, it is apparent that the other contracting party, the seller, waived the purchaser's default and accepted return of the business with only a partial performance. In view of this, it was concluded there was not a second sale by reason of the return of the fixtures and equipment to the seller. A rescission and return of property to its original owner does not result in a second sale. 9/24/76.