Business Taxes Law Guide – Revision 2013
 

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S

495.0000 SALE

Annotation 495.0733

(d) TRANSFERS BETWEEN RELATED LEGAL ENTITIES

495.0733 Sale. The transfer of a vehicle with a balance owing into a trust is not a sale if the transferor continues to make the payments from current income which is not part of the trust's assets and the trust has not agreed to assume the liability. In these circumstances, the transfer has been made for no consideration and no use tax is due on the transfer of the vehicle. If a vehicle which is owned free and clear is transferred into a trust simultaneously with property such as a house and jewelry which the trust has not agreed to assume, there is a balance owing on the house and jewelry, and the transferor continues to make the payments from income which is not part of the trust's assets, a sale does not result as no consideration is involved. However, if the trust were to start making the payments on the house and/or jewelry, a sale would occur and a portion of the consideration would have to be allocated to the transfer of the vehicle. Tax would apply to this prorated amount. 11/21/90.

(Note: Subsequent statutory change re transfers to revocable trusts. See section 6285(b).)