Tax Type
Retail Sales and Use Tax
Description
Sale of a distinct division; Occasional sale
Topic
Collection of Delinquent Tax
Date Issued
03-11-1999
March 11, 1999
Re: § 58.1-1821 Application: Retails Sales and Use Tax
Dear ********
This is in response to your letter in which you seek correction of a sales and use tax assessment issued to ******* (the "Taxpayer') for the period July 1996 through October 1997. I understand that the uncontested portion of the assessment has been paid.
FACTS
The Taxpayer began its manufacturing operations by purchasing the Composite Products Division (the "Division') from ***** (the "Seller'). This transaction entailed the sale of all of the Division's furniture and fixtures, machinery, vehicles, equipment, including research and development equipment, and other tangible personal property related to the Division. The transaction also included the sale of all of the Division's intangible assets and intellectual property, including trade marks, goodwill, and patents.
You maintain that the sale of the Division is an exempt occasional sale.
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:
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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 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.)
- 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.)
The audit assessment will be revised to remove the contested transaction. Because the uncontested portion of the assessment has been paid, this action will reduce the outstanding balance on the audit assessment to zero.
If you have any questions regarding this letter, please contact ***** in the department's Office of Tax Policy at *****.
Sincerely,
Danny M. Payne
Tax Commissioner
OTP/17463I
Rulings of the Tax Commissioner