Ruling Request No. 95-02

Declaratory Rulings

Ruling Request No. 95-02

Re: Request for Ruling Regarding the Bulk Transfer of Assets Under the Sales/Use Tax Law

Request for Ruling

On behalf of your client, Company A, you request a declaratory ruling regarding the application of the sales/use tax law to the bulk transfer of assets to Company A.


Company A, which has its principal place of business located in Connecticut, owns and operates retail grocery stores in Rhode Island. It has entered into a letter of intent with Company B to acquire eight (8) of Company B's stores in Connecticut, Massachusetts, and Rhode Island, including five (5) retail outlets owned and operated by Company B in Rhode Island

The letter of intent contemplates the acquisition by Company A of the following assets attributable to each of the stores:

1. Fixed assets, including equipment, trade fixtures, leasehold improvements, and other assets located at each store, but excluding shopping carts, coffee mills, ordering equipment, software programs and signs;

2. Leasehold interests in the stores and equipment, together with customer lists, fixture plans and mechanical drawings; and

3. Inventory on hand at the date of closing.

Ruling Requested

Company A requests a declaratory rulings that the sale by Company B to Company A of the assets identified above in a single transaction involving the sale by Company B of all of its right, title and interest in its five (5) retail outlets in Rhode Island is exempt from the Rhode Island sales and use tax.


Company B is liquidating all of its stores in Rhode Island. At such time that it does liquidate, it will cease to be a retailer in this state. Therefore, the subsequent sale of all of its assets in a single transaction to Company A becomes a casual sale which is not subject to the sales or use tax.


The sale by Company B to Company A of all of its right, title and interest in its five (5) retail outlets in Rhode Island in a single transaction is not subject to the Rhode Island sales and use tax.

This ruling does not affect Company B's obligation under the law to give a five (5) day notice of the sale of assets to the Tax Administrator and comply with the provisions therein.

This ruling may be relied upon by this taxpayer and shall be valid until the applicable statutory provisions are amended in a manner requiring a different result.

R. Gary Clark

Tax Administrator

May 8, 1995