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BTLG Table of Contents > Sales and Use Tax Annotations > O > 395.0000 Occasional Sales > Annotation 395.1660

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395.0000 Occasional Sales—Sale of a Business—Business Reorganization—Regulation 1595

Annotation 395.1660

(h) Ownership "Substantially Similar"—"Real or Ultimate" Ownership

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395.1660 Sale of Part and Lease of Remainder. A transaction whereby the sole proprietor of a company sold 43 percent of the company's tangible personal property to a commencing corporation in which he was the sole stockholder, and leased the remaining property to the corporation, does not qualify as an exempt occasional sale under section 6006.5(b). The phrase "transfer of property" in section 6006.5(b) means the transfer of beneficial ownership in the property, rather than just the transfer of legal title. Since, under a true lease of tangible personal property the lessor retains beneficial ownership of the property, a lease is not a "transfer of property" under section 6006.5(b). Thus, the transaction in question, with 43 percent of the property transferred to the corporation and 57 percent leased, is not an exempt occasional sale under section 6006.5(b). 4/24/67.