The auctioneer would not have to collect sales tax on the items sold. T, a restaurant, auctions all of its tangible personal property held or used in the course of its business for which it was required to hold a sales tax permit to U and other individuals. T also sells its trade or business to U. U engages in the business of operation of a dance hall and does not continue to operate the restaurant. The casual sales exemption will not apply. Therefore, the auctioneer must collect sales tax on the items sold.
B operates a home furnishing store, but is forced to file bankruptcy.
The assets of the business must be liquidated. A public auction was held and the assets were sold to the highest bidder. The purchaser was not another person who intended to engage in a similar trade or business and none of the items purchased were for resale. 81-01077, April 4, 1983. The tax status of the principal determines the taxability of auction sales when a true agency relationship exists.