Laws, Regulations & Annotations
Business Taxes Law Guide – Revision 2013
Sales and Use Tax Annotations
395.0000 OCCASIONAL SALES—SALE OF A BUSINESS—BUSINESS REORGANIZATION—Regulation 1595
(h) OWNERSHIP "SUBSTANTIALLY SIMILAR"—"REAL OR ULTIMATE" OWNERSHIP
395.1570 Commencing Corporation and Sale of Stock. Corporation A transfers its manufacturing business together with the corporate name and logo to a new Corporation B solely in exchange for stock. Corporation A retains the distribution portion of the business and receives a license from Corporation B to use the company name and logo. Corporation A receives no other consideration other than first issue stock. After the transfer, Corporation A sells some or all of its stock in Corporation B to one or more buyers. Assuming there is a valid business reason for structuring the transaction in this manner, and its purpose is not merely to avoid sales tax, the initial transfer of assets to Corporation B is nontaxable as contribution to a commencing corporation. The later sale of Corporation B's stock is not a sale of tangible personal property. 8/9/93.