I am purchasing a restaurants assets and inventory how do I not get stuck with his unpaid NY state sales tax debt?

Asked over 3 years ago - Plattsburgh, NY

We are buying restaurant equipment, the inventory the menu and everything about it but the property is a rented location. Why are we going to be held accountable for his tax debt when he clearly collected the money with no penalty are there forms we can have signed where he still retains the liability and we start fresh? He owes $1000 less then we are buying it for.

Attorney answers (4)

  1. Theodore Lyons Araujo

    Pro

    Contributor Level 20

    1

    Lawyer agrees

    Answered . Make him pay the tax debt from the sale proceeds.

    Disclaimer: This answer does not constitute legal advice. I am admitted in the States of New York, New Jersey and... more
  2. Michael David Siegel

    Pro

    Contributor Level 15

    1

    Lawyer agrees

    Answered . Buying all the assets of a business is called a Bulk Sale. In NY, the buyer is required to file a form with the New York State Tax Department, identifying the terms of sale. If you did not, then you can be liable for the taxes owed by the seller, if any. A good lawyer in such a purchase (and you should have one for something like this) will not only file the form, but will do a search of unpaid tax liens, and require them to be paid in the contract. If you screwed up, there is not much you can do, except sue the seller to collect.

    Michael D. SIegel, Esq. Siegel & Siegel, P.C. One Penn Plaza Suite 2414 New York, New York 10119 212-721-... more
  3. Robert Jan Suhajda

    Contributor Level 17

    1

    Lawyer agrees

    Answered . You say you are buying rather than have bought the assets. If the transaction is not consummated you have time to correct it. Basically your purchase price shoud be $1000. It is better to consult an attorney up front rather than in the middle of a transaction so now I have to recommend a NY Attorney. Search "Find a Lawyer" on AVVO. You now have to sue him for fraud.

    Disclaimer of California Attorney. Laws differ from state to state. Although the above response is believed to be... more
  4. John Ellis Ellsworth

    Contributor Level 8

    1

    Lawyer agrees

    Answered . If the sale is not yet consummated I would suggest you look into a contract clause requiring that the amount of the tax liability be held at closing in escrow and that it be paid directly to the taxing authority holding the lien. You definitely need to see a NYS attorney for help in doing this or something similar, according to local law.

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