February 11, 1982

On May 13, 1981, ********** ("Corporation") voted to completely liquidate. Under the plan of liquidation, the assets of the Corporation, including two motor vehicles, were distributed in kind to ********** the Corporation's sole shareholder. You inquire whether the transfer of the motor vehicles to the shareholder was subject to tax.

Chapter 64H, Section 2 imposes an excise on sales at retail of tangible personal property in Massachusetts. Chapter 64I, Section 2 imposes an excise on the storage, use or other consumption in Massachusetts of tangible personal property purchased for storage, use or other consumption in Massachusetts. "Sale" and "purchase" are generally defined as any transfer of title or possession of tangible personal property for a consideration, in any manner or by any means whatsoever (G.L. c. 64H, s. 1(12)(a); c. 64I, s. 1).

Casual and isolated sales by a vendor who is not regularly engaged in the business of making sales at retail are exempt from the sales tax (G.L. c. 64H, s. 6(c)), but casual and isolated sales of motor vehicles are generally subject to the use tax (G.L. c. 64H, s. 6(c); c. 64I, s. 7(b)).

In Commissioner of Revenue v. SCA Disposal Services, Inc., 1981 Mass. Adv. Sh. 1337, 421 N.E. 2d 766, the Supreme Judicial Court held that a transfer of motor vehicles pursuant to a statutory merger of wholly-owned subsidiary corporations was not a transfer for a consideration and therefore was not subject to the use tax.

Based on the foregoing, it is ruled that the distribution in kind of the motor vehicles by the Corporation to its sole shareholder on the complete liquidation of the Corporation was not subject to the sales or use tax.

Very truly your

/s/L. Joyce Hampers

L. Joyce Hampers
Commissioner of Revenue

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LR 82-20