Tax Type
Retail Sales and Use Tax
Description
Business liquidation; Occasional sale
Topic
Exemptions
Date Issued
02-18-1994
February 18, 1994
Re: §58.1-1821 Application: Retail Sales and Use Tax
Dear*****************
This will reply to your letter of November 8, 1993 in which you seek correction of a sales and use tax assessment issued to ************** ("the Taxpayer").
FACTS
The Taxpayer, engaged in the sale and service of trucks and the sale of truck parts, was audited for the period August 1990 through March 1993. The only issue under protest is the purchase of tangible personal property from******* ("the Seller").
The Taxpayer established its business by purchasing all the assets of a truck sales and service center from the Seller. The Seller operated one sales and service center in Virginia, and upon the sale of that location to the Taxpayer the Seller owns no property in Virginia. However, the Seller continues to operate sales and service centers in other states.
Because the Taxpayer purchased all of the Seller's Virginia-based property in one transaction, you maintain that the transaction is an exempt occasional sale.
DETERMINATION
Pursuant to Va. Code §58.1-609.10(2), the tax does not apply to an occasional sale as defined in Va. Code §58.1-602 to be:
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- a sale 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 liquidation of any business, provided such sale 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. (emphasis added)
In the instant case the Seller's one Virginia sales and service location was sold to one purchaser in one transaction, and the sale represented the sale of all or substantially all the assets of the Seller's business in Virginia.
Based on the foregoing, I find that this transaction qualifies as an exempt occasional sale, and the assessment will be revised accordingly.
Sincerely,
W. H. Forst
Tax Commissioner
OTP/7517I
Rulings of the Tax Commissioner