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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 395.0073
(a) In General
395.0073 Sales Price of Machinery and Equipment. A company sold its California division under an agreement that contained a breakdown of the selling price which included $2,320,000 for machinery and equipment. The purchaser hired an appraiser who determined that the appraised value of the machinery and equipment was $2,137,500 which is $182,500 less than the agreed selling price. The parties believe that the appraised value should control over the actual price stipulated as having been paid for the machinery and equipment.
The courts have held that the value fixed by agreement between seller and buyer of property exchanged as part of the purchase price, rather than the appraisal or market value, constitutes "gross receipts" upon which the tax is imposed (Hawley v. Johnson (1943) 58 Cal.App.2d 232). 12/13/71.