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Business Taxes Law Guide—Revision 2024
Sales and Use Tax Annotations
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395.0000 Occasional Sales—Sale of a Business—Business Reorganization—Regulation 1595
Annotation 395.0150
(b) Activities Requiring Permit—Property Held or Used In
395.0150 Furniture and Equipment Obtained through Foreclosure. A financial institution, which is regarded as a retailer and holds a California seller's permit for selling and leasing equipment to its customers, obtained title to a hotel and restaurant through foreclosure. Along with the transfer of the real property, the taxpayer obtained title to the furniture, furnishing and equipment. It subsequently sold the furniture, furnishing and equipment along with the transfer of real property to a third party.
Since the taxpayer is already required to maintain a seller's permit for its equipment sales, sales tax applies to the taxpayer's sale of the furniture, furnishing and equipment to its customer.
In this case, the Ontario Community Foundations, Inc. v. State Board of Equalization (1984) 35 Cal.3d 811 does not apply. The taxpayer is not selling property from a business it owns that does not require it to hold a seller's permit. Instead, taxpayer acquired the property through foreclosure and thereafter sold this property to a customer as it would any other equipment it routinely purchased from a vendor and sold or leased to a customer. As such, the taxpayer's sale of the tangible personal property is not exempt as an occasional sale and is subject to sales tax. 5/26/95.