(a) The seller,
transferrer or assignor of business assets in bulk is, at all times,
responsible for the payment of any tax for which he is liable under article 28
and pursuant to the authority of article 29 of the Tax Law.
(b) The seller, transferrer or assignor must
keep and make available to the Division of Taxation all books and records
required to determine his or her tax liability (see Records, section
533.2 of this
Title).
(c) Upon receipt from the
Division of Taxation of a notice requesting that he produce his books and
records for the purpose of an audit, the seller, transferrer or assignor is
required to make his books and records available.
(d) Where the seller, transferrer or assignor
ceases the conduct of a business, he is required to file a final sales and use
tax return within 20 days after ceasing the conduct of the business, make
payment of all taxes due with such return and surrender his certificate of
authority to collect taxes.
(e) The
seller, transferrer or assignor must give each prospective purchaser of his
business a copy of the notice to prospective purchasers relating to the
purchaser's bulk sale notice requirements. Such notice accompanies the
certificate of authority. A copy of such notice may be obtained from the
Taxpayer Assistance Bureau, Department of Taxation and Finance, State Campus,
Albany, NY 12227, or from the Taxpayer Assistance Bureau at any district office
of the Department of Taxation and Finance.
(f)
(1) The
seller, transferrer or assignor, in anticipation of the sale of business
assets, may, prior to the sale, transfer or assignment in bulk of business
assets, request an audit of his books and records to determine his tax
liability up to the prospective date of sale of the business assets. Each
seller is limited to one such request during any three-year period. The request
for such an audit must be made to the Bulk Sales Unit, Central Sales Tax
Section, Audit Division, State Campus, Albany, NY 12227. The request should
include a showing that a sale is intended by attaching thereto a notice or an
advertisement of sale, list of prospective buyers, or other evidence of
intended sale. The department may request additional information and may
require that such additional information be provided on a form obtained at the
Bulk Sales Unit. The Division of Taxation will, in its discretion, determine
whether such an audit will be performed. When it is decided that such an audit
will be performed, the district tax office serving the county in which the
business is located will fix the place and date for the seller, transferrer or
assignor to appear with his books and records for the purpose of the
audit.
(2) Upon completion of the
audit, the Division of Taxation will issue to the seller a bulk sales tax
certificate stating the amount of any liability due up to a date set forth in
the certificate. Such certificate may also state that no taxes are due or may
state the amount of taxes due up to the date of sale. The certificate may be
presented to the purchaser, transferee or assignee at the time of transfer of
the business assets and is to be accepted by the purchaser, transferee or
assignee as proof of the amount of the seller's liability, if any, for the
taxes listed thereon up to the date indicated upon the certificate. Such
certificate does not relieve a purchaser of his obligation to give notice of
the bulk sale to the Department of Taxation and Finance as required by
subdivision (c) of section
1141 of the Tax Law, and section
537.2
of this Part.
Example 1:Upon audit, the seller's tax liability up to the
date of sale is determined to be $8,000. The seller pays the $8,000 to the
Department of Taxation and Finance and is given a bulk sales tax certificate
stating he has no tax liability up to the date of sale. The purchaser, upon
receipt from the seller of the bulk sales tax certificate, may pay over all the
funds to the seller.
Example 2:Upon audit, the seller's tax liability is
determined to be $12,000. The seller pays $2,000 to the department in part
satisfaction of his liability. The fair market value and the purchase price of
the business assets are both $8,000. The seller is given a bulk sales tax
certificate indicating that a tax liability of $10,000 up to the date of sale
still exists against the seller. The purchaser's liability is limited to
$8,000. In addition, the purchaser will be liable for any tax, plus any penalty
and interest, due on the sale of tangible personal property between the seller
and the purchaser.
Example 3:Assume the same facts as in Example 2, except
that the seller pays $8,000 instead of $2,000, and the certificate indicates
that the seller's liability has been ascertained to be $4,000 up to February
28, 1979, a date one month prior to the date of closing. The purchaser may rely
on such fact. However, since there may be additional liability subsequent to
that date, the purchaser is required to withhold the total purchase price
pending the receipt of a notice of total tax due or authority to release the
funds.
Example 4:Upon audit, the seller's tax liability up to the
date of sale is determined to be $6,000. The seller pays $4,000 to the
Department of Taxation and Finance in part satisfaction of his liability. The
fair market value and purchase price of the business is $8,000. The seller is
given a bulk sales tax certificate indicating that a tax liability up to the
date of sale of $2,000 still exists against the seller. The purchaser, upon
receipt of the bulk sales tax certificate, must withhold such $2,000.
(3) The purchaser may rely on the
certificate as a statement of the seller's liability for the period stated
thereon. However, the certificate is not an assessment or the 90-day notice
required to be given by the Division of Taxation.
(4) The seller is not excused from any
obligations or liabilities on his part, either because of the purchaser's
failure to comply with the provisions set forth in section
537.3
of this Part or because of the failure of the Department of Taxation and
Finance to comply with its obligations set forth in section
537.6
of this Part; provided, however, nothing contained in this Part limits the
right of the seller to have his tax due finally and irrevocably fixed pursuant
to the provisions of subdivision (c) of section
1138 of the Tax Law.
