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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 395.0380

(b) Activities Requiring Permit—Property Held or Used In


395.0380 Sale of Time Shares in Staterooms of Cruise Ships. Staterooms are sold as time interval units of one week duration which are designated as "Stateroom-Time Period Units." The prices of the units vary with location and size of the stateroom and the time period of the unit. The time interval method of ownership affords the owner use of his own stateroom during a specific time. Purchasers receive full title interest in their units and a percentage of interest in all the "common area" of the ship.

The operation of the cruise ship is paid for out of the Cruise Ship Association's income from owner assessments which are based upon forecasts of operating costs. Monthly dues similar to those of condominium time share owners are paid by stateroom timeshare owners. Amounts vary depending on the stateroom that is owned.

Based on this scenario, the owner of the cruise ship is selling to purchasers an ownership interest in the vessel. Each purchaser receives a certificate that serves as a title document and evidence of ownership. Thus, the taxpayer is making sales of tangible personal property sufficient in number, scope, and character to require that it hold a seller's permit and report sales tax on its retail sales in this state. The measure of tax is the amount charged for the time period units. 7/31/81.