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
(j) MERGERS AND REORGANIZATIONS
395.2161 Corporate Reorganization. Corporation A transferred its assets to Corporation B, and in turn B issued some of its preferred stock to A. The stock was held in trust pending the recall of outstanding Corporation A stock and the issuance of Corporation B stock for the A stock.
There are three separate and distinct steps in accomplishing the consolidation as A's officers have termed the transaction:
(1) Assets were exchanged for stock in an already existing corporation.
(2) Stock was exchanged for stock.
(3) A was dissolved.
The change in corporate names, etc., does not alter the above three basic and separate acts. The transaction is admittedly not a statutory merger. A's transfer of tangible personal property for stock in an existing corporation is a taxable sale within the meaning of the term as defined in the Sales and Use Tax Law. 2/15/67.