Laws, Regulations & Annotations
Business Taxes Law Guide – Revision 2015
Sales and Use Tax Annotations
395.0000 OCCASIONAL SALES—SALE OF A BUSINESS—BUSINESS REORGANIZATION—Regulation 1595
(g) "SUBSTANTIALLY ALL THE PROPERTY"—TRANSFER OF
395.1295 Occasional Sale Followed by Statutory Merger. A California corporation transferred all of its tangible personal property used in an activity requiring a seller's permit, including other assets not so used and some corporate liabilities, to a wholly owned subsidiary. Such a transfer would qualify as an exempt occasional sale, provided all of the assets used in the activity requiring a seller's permit were transferred, the real or ultimate ownership of the property remained substantially unchanged and the corporation had a valid business reason for structuring the transfer in this manner, other than the avoidance of the sales or use tax. In addition, the subsequent merger of the wholly owned subsidiary into an unrelated Delaware corporation would also not result in sales tax liability, provided the laws of Delaware regarding statutory mergers are similar to those in California. 9/24/93.