Comptroller of the Treasury v. Citicorp International Communications, Inc.

This case involves the termination of a lease for computer equipment. We are asked to decide whether a fee paid by the lessee to terminate the lease is taxable. Two preliminary questions reside within this question: (1) whether the payment was made pursuant to a transaction that can be defined as a “sale,” within the meaning of the relevant Tax General Article sections, and (2) if the payment was made pursuant to a “sale,” whether the amount paid constituted part of the “taxable price” of the lease transaction. We hold that the fee paid to terminate the lease was not a “sale” and, therefore,…