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Business Taxes Law Guide—Revision 2024
Sales and Use Tax Annotations
A B C D E F G H I J L M N O P R S T U V W X
S
495.0000 Sale
Annotation 495.0497
(a) In General—Definition
495.0497 Transfer of Vehicles to Stockholder. "A" a wholly owned subsidiary of "B," transferred certain vehicles to B as a dividend. B then transferred one vehicle to D and the remaining vehicles to C, both wholly owned subsidiaries of B, as a contribution to capital. No consideration was paid to, or received by, any of the corporations as a result of the transfers.
Based on the assumption that no indebtedness was assumed on behalf of A for its transfer as a dividend to B, and that A will receive no other consideration for the transfer, the transfer from A to B is not a sale and is not subject to sales or use tax. Also based on the assumption that no indebtedness was assumed by anyone on the transfers from B to C and D, and since a sale and purchase is a transfer of tangible personal property for a consideration and these transfers were not for a consideration, there was no sale or purchase. Since there was no sale or purchase, there will be no sales or use tax on the transfers from B to C and D. 3/7/88.