Multi-State – Buying A Restaurant? Watch Out For The Seller’s Sales Tax Liabilities!

Total Food Service
by Lance E. Rothenberg, ESQ., LL.M
February 27, 2018

Restaurateurs looking to buy a restaurant, or the business assets of a closing or for-sale restaurant, must take care not to inadvertently also purchase the former owner’s pre-existing sales tax liabilities along with the deep-fryer, reach-in cooler, and banquettes. This type of transaction, for sales tax purposes, is considered a “bulk sale,” and special rules apply.

Bulk sale purchasers can be personally liable for the seller’s unpaid sales and use tax debts. Accordingly, it’s crucial to understand and comply with the applicable bulk sale rules and requirements. Let’s take a brief look at New York’s bulk sale rules, and the consequences for failing to live up to them.

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