- There is unpaid sales and use tax
- The seller is a retailer and has sold out or otherwise quit the business
- The purchaser gave the seller consideration in the form of money, property, assumption of liabilities, forgiveness of debt or any other valuable consideration, and
- The purchaser failed to withhold and remit a suﬃcient amount of purchase price to pay sales tax on the sale of the business, as well as any outstanding sales and use tax liabilities, plus applicable penalties and interest, incurred by the predecessor or any former owner
Successor’s liability will not apply to business transfers that are the result of an assignment for the beneﬁt of creditors, foreclosures, or sales by trustees in bankruptcy.
Prospective buyers are urged to request a certiﬁcate of tax clearance from the Kentucky Department of Revenue to verify a business’s tax liabilities prior to purchase.
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