(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.
(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.
