Laws, Regulations & Annotations

Business Taxes Law Guide – Revision 2018

Sales and Use Tax Annotations

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Annotation 365.0040

365.0040 Reacquisition of Business by Mortgagee. Where tangible personal property is sold under a purchase money mortgage and the purchaser-mortgagor is in default and the seller-mortgagee reacquires the property, and the only consideration received by the mortgagor is cancellation of the unpaid balance of the mortgage note, the transfer to the mortgagee does not constitute a taxable sale. However, where tangible personal property is subjected to a nonpurchase money mortgage and the mortgagor defaults and transfers his beneficial interest and title in the mortgaged property to the mortgagee in consideration of cancellation of the mortgagor's obligation, the transfer of title to the mortgagee constitutes a taxable retail sale. 6/27/67.