Tax Type
Retail Sales and Use Tax
Description
Occasional sales, including mergers; Sale of substantially all assets of the seller
Topic
Taxability of Persons and Transactions
Date Issued
02-24-1997
February 24, 1997
Re: § 58.1-1821 Application: Retail Sales and Use Tax
Dear****************
This is in response to your letter of December 23, 1996 in which you seek correction of a sales and use tax assessment issued to **********, trading as**************** (the "Taxpayer").
FACTS
In August 1996, the Taxpayer purchased a Virginia hotel from ******** (the "Seller”). An assessment was made by the department based on the sales price of the tangible personal property associated with that sale. The assessment included no other transactions.
The Taxpayer contends the sale is an exempt occasional sale under Virginia Regulation 630-10-75. In making this claim, the Taxpayer has provided documents indicating that the hotel constituted the entire operation of the Seller and that the hotel was the only asset owned by the Seller.
DETERMINATION
Code of Virginia § 58.1-609.10(2) provides an exemption from the tax for an occasional sale as defined in § 58.1-602. That section defines an "occasional sale" as:
-
- 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 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)
In the instant case, the sale of the hotel represents the sale of all or substantially all the assets of the Seller. As such, the sale qualifies as an exempt occasional sale as defined above.
Based on this determination, the assessment will be fully abated. If you have
any additional questions regarding this issue, please contact *********in my
Office of Tax Policy at ********.
Sincerely,
Danny M. Payne
Tax Commissioner
OTP/12065I
Rulings of the Tax Commissioner