Tax Type
Retail Sales and Use Tax
Description
Occasional Sales; Sale of Virginia Branch Offices
Topic
Taxability of Persons and Transactions
Date Issued
02-14-1991
February 14, 1991
Re: Request for Ruling: Retail Sales and Use Tax
Dear****************
This will reply to your letter of December 5, 1990 in which you requested a ruling on the applicability of the sales and use tax to a transaction engaged in by your client, ************** (the "Taxpayer").
FACTS
The Taxpayer, which operates as a bank, has many branches in the mid-atlantic region, three of which are located in Virginia. The Taxpayer desires to sell its Virginia branches to another bank. The assets being sold are the leases for the properties, the personalty on each premise and the deposits associated with each branch. All of the Taxpayer's Virginia assets are being sold in one sale. When this transaction is completed the Taxpayer will cease doing business in Virginia.
You request a ruling as to whether the sale of such branches qualify under the occasional sale exemption from the retail sales and use tax.
RULING
Va. Code §58.1-608(10)(b) exempts an occasional sale from the retail sales and use tax. An "occasional sale" is defined in Va. Code §58.1-602 as:
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- a sale of tangible personal property not held or used by a seller in the course of an activity for which he is required to hold a certificate of registration, including the sale or exchange of all or substantially all the assets of any business and the reorganization or liquidation of any business, provided such sale or exchange is not one of a series of sales and exchanges sufficient in number, scope and character to constitute an activity requiring the holding of a certificate of registration. (emphasis added)
In the instant case, the Taxpayer is not in the business of selling its assets on a regular basis and does not hold and is not required to hold a certificate of registration for the retail sales tax. The three branches which comprise all of its assets in Virginia, will be sold to one purchaser, all in one transaction. Once the transaction is completed, the Taxpayer will have completely liquidated its business operation within Virginia.
Based on the foregoing, I find that the sale of the three branches by the Taxpayer to one purchaser will qualify as an occasional sale and thus be exempt from the retail sales and use tax.
If you have any further questions regarding this matter, please contact the department.
Sincerely,
W. H. Forst
Tax Commissioner
Rulings of the Tax Commissioner