Tax Type
Retail Sales and Use Tax
Description
Company sale of Virginia division; Occasional sale
Topic
Exemptions
Taxability of Persons and Transactions
Date Issued
03-10-1994
March 10, 1994
Re: Request for Ruling: Retail Sales and Use Tax
Dear********
This will reply to your letter of February 16, 1994 in which you seek a ruling on the application of the tax to a proposed sale by ********************("the Seller") of all of the assets of its ***************("the Division").
FACTS
The Seller, which operates as a multifaceted corporation headquartered outside of Virginia, plans to sell the Division in one transaction to one buyer. The Division manufactures imprinting machinery and operates separately from the Seller in that it provides its own accounting and computer functions and its own research and development activities. Further, the Division maintains its own books and records (located within Virginia), does its own hiring, and keeps its own payroll and personnel records.
After the sale, the Seller will continue to operate other manufacturing divisions. None of these other divisions, however, are located in Virginia, and none of these other divisions manufacture the type of imprinting machinery currently manufactured by the Virginia Division.
DETERMINATION
Va. Code §58.1-609.10(2) provides an exemption from the tax for an occasional sale. Va. Code §58.1-602 defines an "occasional sale" to mean:
-
- 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 ... 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. (emphasis added)
Based on the information you provided, the sale of the Division is the sale of all or substantially all the assets of a business and is therefore an exempt occasional sale.
Please contact the department if you need additional information regarding this issue.
Sincerely,
Danny M. Payne
Acting Tax Commissioner
OTP/7688I
Rulings of the Tax Commissioner