(a) The Department of Taxation and Finance,
upon receipt of a notice of sale, transfer or assignment in bulk of
business
assets from the
purchaser, transferee or assignee, will respond, by mailing
within five business days (excluding Saturday, Sunday or a day which is a legal
holiday in this State) any or all of the following:
(1) an acknowledgment of the receipt of such
notice;
(2) advice to the
purchaser, transferee or assignee that such notice is or is not proper (see
section
537.2
of this Part); or
(3) a notice of
possible claim to the
purchaser,
seller and escrow agent, if any, for taxes due
the State or a statement that no taxes are due.
For the purposes of this subdivision, the date of receipt
of the notice of sale from the purchaser, transferee or assignee is the date
the notice is actually delivered to the Bulk Sales Unit or, if applicable, the
date it is deemed received by the Bulk Sales Unit pursuant to section
537.2(c)(6)
of this Part, whichever date is later, rather than the date of registry or
certificate of mail or the date of mailing.
(b) If the Division of Taxation fails within
five business days to mail a notice of possible claim for taxes due the State,
and such purchaser, transferee or assignee has given proper (both as to service
and contents) and timely notice, the purchaser, transferee or assignee is
relieved from his obligation to withhold any funds from the seller, transferrer
or assignor, and is relieved from liability for taxes due by the seller (except
the sales taxes due on the sale of the tangible personal property) except in
the situation and to the extent that there are outstanding warrants or
judgments for unpaid sales tax liability due and owing by the seller. The
seller, transferrer or assignor, however, is not relieved of any of his
obligation or liability. If the department has issued a notice of possible
claim to a purchaser in response to a notice of sale, an additional notice of
possible claim will not have to be issued where a revised notice of sale is
filed.
(c) The Division of Taxation
will, within 90 days after receipt of a notice of sale, transfer or assignment
in bulk of business assets, mail to the purchaser, transferee or assignee and
the seller, transferrer or assignor a notice of the total taxes due the State
or a notice that no taxes are due and the funds withheld may be
released.
(d) If the Division of
Taxation fails, within 90 days after receipt of a proper (both as to service
and contents) notice of sale, transfer or assignment in bulk of
business assets
(whether or not such notice was timely in accordance with the provisions of
subdivision [c] of section
537.2
of this Part), to mail a notice of claim for total taxes due from the
seller,
transferrer or assignor, or fails to mail an authorization for the release of
funds withheld by the
purchaser, transferee or assignee, the
purchaser,
transferee or assignee is relieved from both his obligation to further withhold
such funds from the
seller, transferrer or assignor and his liability for the
taxes due from such
seller, transferrer or assignor. However, the
seller,
transferrer or assignor remains liable.
(e) The Department of Taxation and Finance
will, upon payment of the taxes due, if any, from the seller, transferrer or
assignor, issue to the purchaser, transferee or assignee or the escrow agent,
if any, an authorization to release funds to which the seller, transferrer or
assignor may be entitled. Such authorization may limit the amount of such funds
to be released.
(f) When an audit
has been performed prior to a sale of
business assets as provided for in
section
537.5
of this Part, the Division of Taxation shall issue a bulk sales tax certificate
to the
seller, transferrer or assignor, indeicating his tax liability up to the
date stated on the certificate. Such bulk sales tax certificate, if presented
by the
seller, transferrer or assignor to the
purchaser, transferee or
assignee, serves as proof of the amount of the
seller's liability stated
thereon up to the date indicated upon the certificate.
(g) Where the liability of a
purchaser,
transferee or assignee, for the payment to the State of any such taxes
determined to be due from the
seller, transferrer or assignor, has been wholly
paid or satisfied or no longer exists, the Division of Taxation shall mail to
such
purchaser, transferee or assignee a notice, addressed to his last known
address, setting forth that such liability has been wholly paid or satisfied or
no longer exists. The Division of Taxation shall include in such notice the
following additional information:
(1) the
name and last known address of the purchaser, transferee or assignee;
(2) the amount of the lien paid, satisfied or
vacated; and
(3) a statement to the
effect that consumer reporting agencies must delete from a credit file any
reference to the particular tax lien within 30 days of receipt from the
purchaser, transferee or assignee of such notice.
However, an order or decree in a bankruptcy proceeding does
not give rise to the notice requirements of this subdivision.
(h) The following examples
illustrate the provisions of this section:
Example 1:A person purchasing business assets in bulk will
take possession of the assets and pay for the same on August 22, 1981. He
effects personal service of a properly executed notice of sale by having such
notice hand-delivered to an officer of the Department of Taxation and Finance
who is authorized by the department to accept such service. The notice of sale
is hand-delivered on August 9, 1981. Since the notice was served at least 10
days prior to the date of sale, the notice is timely. However, personal service
of the notice and the receipt of the notice is deemed to have taken place on
August 12, 1981, 10 days prior to the date of sale. The Division of Taxation
will mail to the purchaser a notice of possible claim for taxes due the State
on or before August 19, 1981, which date is five business days subsequent to
August 12, 1981. Furthermore, the Division of Taxation will mail to the
purchaser a notice of the total taxes due the State, or a notice that no taxes
are due and the funds withheld may be released. Such notice will be mailed by
the Division of Taxation on or before November 10, 1981, which date is 90 days
after August 12, 1981. The failure of the Division of Taxation to send either
notice within the appropriate times provided herein will discharge the
purchaser from liability. However, the seller is not discharged from his
liability.
Example 2:Assume the same facts as in Example 1, except
that personal service was effected on August 12, 1981. Since the notice was
served at least 10 days prior to the date of sale, the notice is timely. The
obligations of the Division of Taxation with respect to mailing the notice of
possible claim for taxes due and the mailing of the notice of the total taxes
due are the same as in the above example.
Example 3:Assume the same facts as in Example 1, except
that the notice of sale is hand-delivered on August 14, 1981. The notice of
sale is untimely. The Division of Taxation will mail to the purchaser a notice
of possible claim for taxes due the State, and will attempt to mail the same as
expeditiously as possible. Furthermore, the Division of Taxation will mail to
the purchaser a notice of the total taxes due the State or a notice that no
taxes are due and the funds withheld may be released. Such notice will be
mailed by the Division of Taxation on or before November 12, 1981, which date
is 90 days after August 14, 1981. The failure of the Division of Taxation to
mail such notice on or before November 12, 1981 will discharge the purchaser
from liability. However, the seller is not discharged from his
liability.
Example 4:Assume the same facts as in Example 3, except
that the notice of sale is mailed by registered mail on August 14, 1981. The
notice of sale is untimely. The obligations of the Division of Taxation with
respect to mailing the notice of claim for possible taxes due and the mailing
of the total taxes due are the same as in the above example.
Example 5:A person purchasing business assets in bulk will
take possession of the assets and pay for the same on August 22, 1981. He mails
a properly executed notice of the sale by certified mail--return receipt
requested--to the Bulk Sales Unit as provided in subdivision (b) of section
537.2
of this Part. The postmark date stamped on the sendor's receipt for such mail
is August 9, 1981. The mail is actually received by the Bulk Sales Unit on
August 11, 1981. Since the notice was served at least 10 days prior to the date
of sale, the notice is timely. However, service of the notice and receipt of
the notice is deemed to have taken place on August 12, 1981, 10 days prior to
the date of sale. The Division of Taxation will mail to the purchaser a notice
of possible claim for taxes due the State on or before August 19, 1981, which
date is five business days subsequent to August 12, 1981. Furthermore, the
Division of Taxation will mail to the purchaser a notice of the total taxes due
the State or a notice that no taxes are due and the funds withheld may be
released. Such notice will be mailed by the Division of Taxation on or before
November 10, 1981, which date is 90 days after August 12, 1981. The failure of
the Division of Taxation to send either notice within the appropriate times
provided herein discharges the purchaser from liability. However, the seller is
not discharged from his liability.
Example 6:Assume the same facts as in Example 5, except
that, although the postmark on the sender's receipt for the certified
mail--return receipt requested--is stamped August 9, 1981, the envelope or
wrapper containing the notice is actually received by the Bulk Sales Unit on
August 14, 1981. Since the notice was served at least 10 days prior to the date
of sale, the notice is timely. For purposes of the 90-day notice by the
Division of Taxation, notice of the total taxes due the State or notice that no
taxes are due and the funds withheld may be released, the date of receipt of
the notice is deemed to be August 12, 1981, 10 days prior to the date of sale.
However, for purposes of the notice by the Division of Taxation of possible
claim for taxes due the State, the date of the receipt of the notice is August
14, 1981, the date when such notice was actually received by the Bulk Sales
Unit. The Division of Taxation will mail to the purchaser a notice of possible
claim for taxes due the State on or before August 21, 1981, which date is five
business days subsequent to August 14, 1981. Furthermore, the Division of
Taxation will mail to the purchaser a notice of the total taxes due the State
or a notice that no taxes are due and the funds withheld may be released. Such
notice will be mailed by the Division of Taxation on or before November 10,
1981, which date is 90 days after August 12, 1981. The failure of the Division
of Taxation to send either notice within the appropriate times provided herein
will discharge the purchaser from liability. However, the seller is not
discharged from his liability.
Example 7:Assume the same facts as in Example 6, except
that the postmark is dated August 12, 1981. Since the notice is served at least
10 days prior to the date of sale, the notice is timely. The obligations of the
Division of Taxation with respect to the mailing of the notice for possible
taxes due and the mailing of the notice of total taxes due are the same as in
the above example.
Example 8:Assume the same facts as in Example 7, except
that a warrant for unpaid sales taxes had been docketed as a judgment against
the seller on July 22, 1980, that is, more than 10 days prior to the date of
sale. The Division of Taxation will mail to the purchaser a notice of possible
claim for taxes due, despite the fact that the purchaser has notice of record
of a possible claim for taxes due by virtue of the docketed warrant against the
seller. The Division of Taxation will attempt to mail the notice of possible
claim as expeditiously as possible. The Division of Taxation will also mail to
the purchaser a notice of the total taxes due the State or a notice that no
taxes are due and the funds withheld may be released. Such notice will be
mailed on or before November 10, 1981, which date is 90 days after August 12,
1981.
Example 9:Assume the same facts as in Example 7, except
that no return receipt was requested. Since no return receipt was requested,
the date of service is the date when the notice was received by the Bulk Sales
Unit, that is, on August 14, 1981 rather than the date stamped on the envelope
or wrapper. The notice is therefore untimely since service was not made at
least 10 days prior to August 22, 1981, the date of sale. The Division of
Taxation will mail to the purchaser a notice of possible claim for taxes due
the State and will attempt to mail such notice as expeditiously as possible.
Furthermore, the Division of Taxation will mail to the purchaser a notice of
the total taxes due the State or a notice that no taxes are due and the funds
withheld may be released. Such notice will be mailed by the Division of
Taxation on or before November 12, 1981, 90 days after August 14, 1981. The
failure of the Division of Taxation to send such notice by November 12, 1981
discharges the purchaser from liability. However, the seller is not discharged
from his liability.
