California Tax Appeals Office Denies Dental Practice’s Exemption from Sales Tax on Asset Sales

• The California Office of Tax Appeals upheld a sales tax assessment of nearly $1 million against Coast Dental Services, Inc.
• Coast Dental sold its business assets through 25 separate agreements with 15 buyers.
• Coast Dental reported these sales as exempt occasional sales but held a seller’s permit for regular activities.
• The California Department of Tax and Fee Administration determined the sales required a seller’s permit.
• California law exempts occasional sales unless they are frequent enough to require a permit.
• The OTA found Coast Dental’s sales did not qualify as a single exempt occasional sale.
• Coast Dental’s intent to sell the entire business was insufficient without evidence of interdependent contracts.
• Only the first two sales were exempt; the rest were taxable under CDTFA regulation.

Source: jdsupra.com

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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