Abstract
This paper explores the potentially harsh impact of the bulk sales provisions of New York State’s Tax Law on the purchaser of assets (either personal, intangible or real) from a sales tax vendor other than in the ordinary course of business. The author also points out that New York is not alone in its treatment of these types of transactions. Key words: Bulk sales, sales tax, sales tax vendor, personal liability.
Highlights
Many of us have had an occasion to witness a situation in which a practitioner learns of a legal provision that adversely affects the outcome of a completed matter only after its closing
Those practitioners involved in transactions for the purchase of business assets must consider Tax Law (TL) §1141(c) or bear the consequent liability of failing to do so. (Fisher and Roberts, 2007)
TL §1141(c) establishes certain pre-closing notification requirements in the event of the bulk sale of assets owned by a business required to collect and remit New York State sales tax
Summary
Many of us have had an occasion to witness a situation in which a practitioner learns of a legal provision that adversely affects the outcome of a completed matter only after its closing. As an exception to this rule, the purchaser will not be held liability if he strictly follows the pre-transfer notification provisions established under that statute in order to put the New York State (the “State”) on notice of the transaction. Those practitioners involved in transactions for the purchase of business assets (that is, real estate closings, business sales, mergers and acquisitions and succession planning to name a few) must consider TL §1141(c) or bear the consequent liability of failing to do so. Those practitioners involved in transactions for the purchase of business assets (that is, real estate closings, business sales, mergers and acquisitions and succession planning to name a few) must consider TL §1141(c) or bear the consequent liability of failing to do so. (Fisher and Roberts, 2007)
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