dissenting.
Although I agree with the majority regarding the jurisdiction and abstention issues, I disagree that the bankruptcy court’s order prohibits the state from collecting the tax at issue here. I therefore respectfully dissent.
The California Sales and Use Tax Regulations (“C.S.U.T.R.” or “regulations”) provide that, in general, a lease of tangible personal property is a “sale” and “purchase.” C.S.U.T.R. 1660(b)(1). The regulations require payment of a use tax based upon the value of the rentals arising from such a transaction. C.S.U.T.R. 1660(c)(1). This tax, according to the regulations, is a tax upon the lessee’s use of the property in California. Id. The lessor is required to collect the tax from the lessee but the lessee remains liable for the tax unless given a receipt" evidencing collection by the lessor. C.S.U.T.R. 1660(c)(1). The regulations make an exception where the property is leased in substantially the same form as acquired and where sales tax on the property has been paid upon initial purchase by lessor; the subsequent lease in such cases is not defined as a “sale” and “purchase”. C.S.U.T.R. 1660(b)(1)(E). Accordingly, no sales or use tax is due. C.S. U.T.R. 1660(c)(2).
It is clear from this summary that the tax at issue here is based neither upon any transaction involving the trustee nor upon the use of the property by the party purchasing from the trustee (“purchaser”). Rather, the tax is based upon a separate transaction between the purchaser and a third party lessee; the tax is upon the lessee’s use of the property. The trustee is not required to pay the tax or to collect it. Rather, the purchaser must collect the tax, but the regulations make clear that the lessee is the party liable for the tax unless the purchaser collects it. See C.S.U.T.R. 1660(c)(1).
*761-763The matter sub judice is, in my opinion, distinguishable from the Goggin cases. California State Board of Equalization v. Goggin (“Goggin I”), 191 F.2d 726 (9th Cir.1951), cert. denied, 342 U.S. 909, 72 S.Ct. 302, 96 L.Ed. 680 (1952); California State Board of Equalization v. Goggin (“Goggin II”), 245 F.2d 44 (9th Cir.), cert. denied, 353 U.S. 961, 77 S.Ct. 863, 1 L.Ed.2d 910 (1957). The Goggin cases stand for the proposition that a state may not, through its tax laws, impose a burden upon the essential liquidation process of the bankruptcy court.1 As a result, a state may neither impose a sales tax upon the trustee when a sale is part of a court-ordered liquidation nor impose a use tax upon the party who purchases property at such a sale. Goggin I, 191 F.2d at 703; Goggin II, 245 F.2d at 45. The tax at issue here does not burden the essential liquidation process of the bankruptcy court and, in my opinion, is not assessed “by reason of the sale.” The tax is assessed against the party leasing the property from the purchaser and is based upon that party’s use of the property. The purchaser merely collects the tax and pays it to the state.
The majority relies upon the fact that the tax at issue is only assessed when no sales tax has been paid by the purchaser/lessor. This fact alone, however, does not make this tax one that is assessed “by reason of” the liquidation sale. The tax at issue here has no relationship to the sale of the property by the trustee: It is assessed against an unrelated third party; it is based upon that party’s use of the property; and the amount of the tax assessed upon the amount of rent charged. In my opinion, therefore, the tax at issue is not assessed “by reason of” the liquidation sale and imposes no burden upon the essential liquidation process of the bankruptcy court. Accordingly, I respectfully dissent.
. This is the holding of the Goggin cases. Notwithstanding the broad dicta from Goggin II cited by the majority, the relevant determination is whether the tax is imposed "by reason of’ the liquidation sale. In this case, it is not.