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Business Taxes Law Guide—Revision 2024
Sales and Use Tax Annotations
A B C D E F G H I J L M N O P R S T U V W X
B
150.0000 Buildings and Other Property Affixed to Realty—Regulation 1596
Annotation 150.0298
150.0298 Leased Premises—Sale of Machinery and Equipment. Company A is the lessor to Company B of a building and of certain machinery and equipment installed therein. Pursuant to the lease agreement concerning the machinery and equipment, B was authorized to remove items of equipment (with title passing to B) provided equipment of equal value was substituted (with title passing to A) for the equipment removed.
The sale by A to B was sale of tangible personal property because removal of the property was contemplated at the time of the sale. Accordingly, the sale was a sale of tangible personal property notwithstanding the fact that the property was never classified as "leased fixtures" pursuant to section 6016.3 while in place and under lease. The property was not "leased fixtures" because the lessor of the property was also the lessor of the building. It appears that the sale of this property did not qualify as an "occasional sale."
The sale by B of the replacement property to A was also a sale of tangible personal property. The property in question appears to have been machinery and equipment. B sold the equipment to A and installed the equipment. This was a sale of tangible personal property to be installed and not a sale of property "in place." The sale of the property by B to A was a taxable sale of tangible personal property notwithstanding the fact that the property never became "leased fixtures" under section 6016.3. 10/26/79.