Section 1146(c) of the Code provides that delivery of an instrument of transfer (such as a bill of sale or deed) “under a plan confirmed under §1129 of this title, may not be taxed under any law imposing a stamp tax or similar tax.” In some jurisdictions, courts include in §363 sale orders entered in chapter 11 cases, preconfirmation, a provision that the sale is not subject to transfer taxes under §1146(c) because the sale is in contemplation of a plan. A recent decision of the U.S. District Court for the Southern District of New York questions this practice, at least where the plan has not been drafted or filed as of the time of the sale, and remains unfiled months after the sale in question. In re 310 Associates, L.P., 282 B.R. 295 (S.D.N.Y. 2002). As the court noted, “A transfer cannot take place with the authorization of a plan that has not been drafted…To determine otherwise would render both the words ‘plan’ and ‘confirmed’ in §1146(c) meaningless.” Id. at 299. The court left open the question of whether §1146(c) exempts from taxation a transfer that occurs after a plan has been filed, but before confirmation. Id.
In another decision on the same section, the Delaware District Court held that California sales tax was not a “stamp or similar tax” under §1146(c). In re GST Telecom, Inc., 2002 WL 1737445 (D. Del.).