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 395.1840

(i) TRANSFERS AND CONTRIBUTIONS TO NEW CORPORATION OR PARTNERSHIP

395.1840 Commencing Corporation. The sale of partnership assets to a commencing corporation for stock is an exempt occasional sale provided the requirements of section 6006.5(b) are met even though it is contemplated there will be a sale of stock for cash which will substantially change the ultimate ownership where the Corporations Commissioner requires the sale to the partners to take place prior to any sale of stock for cash. Such procedure is not done to avoid sales tax, and does not constitute a step transaction. The requirements of the Corporations Commissioner constitute a good business reason in this instance. 3/1/66; 7/28/86.