What are the NY/NJ laws for bulk sales? Do I have to notify the state and if so, when?

 

A: In New York and New Jersey, the purchaser of a New York business must provide the state with a "pre-closing" notification of the proposed business sale. This is also commonly referred to as a "Bulk Sales Notice." In a bulk sales notice the purchaser must include: 

  • The terms of the sale; and
  • The anticipated date of the closing. 

The bulk sales notice may be prepared by your New York business attorney, and must be filed with the New York State Department of Taxation. The date of this filing must be no less than 10 days prior to the closing sale date.

The purpose of the bulk sales notice is to assist the state with its sales tax collections. When you submit a bulk sale notice, the state will examine the seller's tax records and determine whether they owe outstanding sales tax.

If the seller owes outstanding sales tax, then you (the business purchaser) will be required to pay the seller's outstanding sales tax from your proceeds. This amount is due to the seller at closing. If you do not pay the seller's outstanding sales tax, the State of New York will hold you liable for the taxes.

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