Laws, Regulations & Annotations

Business Taxes Law Guide – Revision 2018

Sales and Use Tax Annotations

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535.0000 SUCCESSOR'S LIABILITY—Regulation 1702

Annotation 535.0061

535.0061 Purchase of Out-of-State Assets. A taxpayer purchases the out-of-state assets of a California business which primarily is located outside California. The seller maintains only a warehouse/sales office in California. The warehouse/sales office is not included in the transaction and it is closed at about the same time that the transaction is entered into. The assets transferred are substantially all of the assets of the seller. The seller owes amounts of tax and interest to the Board at the time of the transfer. The taxpayer does not obtain a tax clearance from the Board.

Successor's liability can arise from the purchase of a substantial portion of a business or stock of goods. It is not necessary that the entire business or stock of goods be transferred to the purchaser. Since the seller is engaged in business in California, it is immaterial that the assets purchased are located outside California. 6/2/94.