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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 395.0383
(b) Activities Requiring Permit—Property Held or Used In
395.0383 Seller's Permit Required for Sales to Subsidiary. A television broadcaster manufactures commercials for its customers. If a customer wishes to obtain a copy of the commercial, a subsidiary of the broadcaster makes and sells the copies. The broadcaster wishes to sell its assets. It inquired as to whether the asset sale would qualify as an exempt occasional sale.
If the broadcaster sells the commercials to the subsidiary, it is engaged in a business requiring the holding of a seller's permit, and the sale of assets would not be regarded as an exempt occasional sale. If, however, the broadcaster transfers only possession of the commercials to the subsidiary for purposes of making copies, makes no charges to the subsidiary, and makes no other sales of tangible personal property, the assets sale would be an exempt occasional sale. The sales of duplicate tapes by the subsidiary are not attributed to the parent. 10/24/80.