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BTLG Table of Contents > Sales and Use Tax Annotations > U > 570.0000 Use of Property in State and Use Tax Generally > Annotation 570.0230

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U

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570.0000 Use of Property in State and Use Tax Generally

Annotation 570.0230

(a) In General

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570.0230 Person—Joint Operating Agreements. Operating agreements for the operation of an oil well involving several participants may result in the creation of a "person" under the Sales and Use Tax Law (i.e., any group or combination acting as a unit). However, it may not have any tax liability if it is not the "person" which is buying or selling tangible personal property. The "person" who exercises the right of power over the tangible personal property "incident to the ownership of the property" is the one responsible for any tax liability. If the facts demonstrate that ownership of the property rests in one or more of the participants, these "person(s)" bear the responsibility for any sales or use tax liability. Unless the unit was buying or selling property in its own name, it would not incur any tax liability despite the fact that it is a "person" for sales and use tax purposes. 1/17/91.