Florida – Transfer of Tax Liability

SALT Report 1484 – Florida Governor Rick Scott recently signed legislation that would relieve the purchaser of a business of the tax liabilities of the previous owner.  The bill, HB 103, is a combined version of two bills that were previously introduced:  House Bill 103 which was filed by Representative Wood on August 25, 2011 and Senate Bill 170 which was filed by Senator Altman on August 29, 2011.

Under the bill, the buyer of a business can now purchase a business or the assets of a business without assuming the sales and use tax or communication services tax liabilities of the prior business if the buyer receives a certificate of compliance from the seller showing that the seller:

  • Has not received notice of audit,
  • Has filed all required tax returns,
  • Has paid the tax due from those returns, and
  • There are no insiders in common between the buyer and the seller, or
  • The Department of Revenue conducts an audit, at the request of the buyer or seller, and finds that the seller is not liable for any taxes
In addition, the new law provides that section FS 213.758 would not impose liability on the buyer of a business, assets of a business, or stock of goods of a business when:
  • The transfer is an involuntary transfer,
  • The buyer is not an insider,
  • The assets transferred are a 1 to 4 family residential property,
  • The property that has not been improved with any building, or owner-occupied commercial property; and
  • No other assets of the business are included in the transfer
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