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BTLG Table of Contents > Sales and Use Tax Annotations > S > 535.0000 Successor's Liability > Annotation 535.0046

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S

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535.0000 Successor's Liability—Regulation 1702

Annotation 535.0046

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535.0046 Lessee Satisfies Own Liability—Not Liability of Sublessee. A taxpayer leased real property, signing a personal guarantee for performance of the lease terms. The taxpayer constructed a car wash on the property. The taxpayer sold the car wash and subleased the real property to a third party. The third party subsequently encountered financial difficulties and returned the business to the taxpayer. At the time the third party was in arrears both on payment of sales tax and in rent payable to the owner of the real property. The taxpayer paid the back rent and took over operation of car wash.

There is no successor liability related to the third party's outstanding sales tax liability. The taxpayer's payments to the lessor of the real property were in satisfaction of the taxpayer's own liability under the personal guarantee. The payment was not an assumption of the debts of the third party. 2/4/94.