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BTLG Table of Contents > Sales and Use Tax Annotations > P > 410.0000 Permits > Annotation 410.0209

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410.0000 Permits—Regulation 1699

Annotation 410.0209

(a) In General

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410.0209 Separate Entity Permit Requirements. Corporation A is wholly owned by Corporation B and exists as a corporation in name only. It has no employees of its own and has no bank accounts. Ninety-nine percent of its business is with its parent and it draws no profit therefrom. Corporation A charges no mark up on sales between A "and its customers" (its parent and its accommodation customers). Corporation B pays for much of the expenses to operate Corporation A and Corporation A does not actually generate any revenue for itself.

It is apparent that Corporation A has failed to comply with the basic requirements for obtaining and holding a seller's permit. Under the facts in this case, the Board will not regard Corporation A as a separate person from Corporation B unless it actually creates a separate identity, with employees, accounting systems, and bank accounts. It must also add a mark up on its sales, and invoice all customers. Otherwise, no seller's permit will be issued to Corporation A and the Board will disregard its existence for purposes of sales and use taxes. 11/4/96.