Document Number
Tax Type
Retail Sales and Use Tax
Sale of division; Occasional sale
Date Issued
July 11, 1985

Re: Request for Ruling/Sales and Use Tax

Dear ****

This will reply to your letter of June 6, 1985, requesting a ruling on the correct application of the Virginia sales and use tax to the purchase of three retail stores, which represent a separate division of (X Corporation)


***** (Purchaser), a subsidiary of (Y Corporation)is acquiring the fixed assets of the three stores in *****, Virginia from (X Corporation). Pursuant to a plan of reorganization, (X Corporation) is completely leaving the retail clothing business, but will continue to own and operate its 42 retail food stores in Virginia.


§58.1-608(15) of the Virginia Code exempts from the sales and use tax an "occasional sale" which is defined in §58.1-6O2(12) as,
    • "A sale or exchange of tangible personal property not held or used by a seller in the course of an activity for which he is required to hold a certificate of registration, including the sale or exchange of all or substantially all the assets of any business and the reorganization or liqui-dation of any business, provided such sale or exchange is not one of a series of sales and exchanges sufficient in number, scope and character to constitute an activity requiring the holding of a certificate of registration."

The term "business" is defined in §58.1-602(1) as "any activity engaged in by any person, or caused to be engaged in by him, with the object of gain, benefit or advantage, either directly or indirectly."

Based on the facts presented, the purchase of all of the fixed assets of the three stores in Virginia by [Purchaser] from (X Corporation) represents the purchase of all or substantially all the assets of a business, since the retail clothing sales division of (X Corporation) is entirely separate and distinct from (X Corporation=s) retail grocery sales division. Accordingly such purchase would qualify for the "occasional sale" exemption from Virginia sales and use tax.

I hope this has answered your questions but please let me know if I can be of further assistance.


W. H. Forst
Tax Commissioner

Last Updated 08/25/2014 16:46