Businesses are reminded to comply with Pennsylvania’s bulk sale provision when transferring or selling assets. Taxpayers are required to obtain a bulk sale clearance certificate from the Department of Revenue when a taxpayer transfers or sells 51% or more of its assets to a purchaser. Assets include fixtures, equipment, buildings, real estate, and any type of merchandise or stock of goods. The bulk sale provision applies to corporate tax, employer withholding tax, sales and use tax and any other tax administered by the Department of Revenue.
Taxpayers must submit an Application for Tax Clearance Certificate (REV-181) to the Department of Revenue at least 10 days before the bulk sale transfer takes place. In order to obtain the tax clearance certificate, a seller must be current with all tax liabilities and tax reports up to the date of transfer. As bulk sales rarely coincide with corporate tax deadlines, the seller may be required to file short period estimated tax reports through the date of transfer and make payment of any taxes due. The short period tax reports will be stricken by the Department upon filing of the annual tax report.
A purchaser is required to obtain the bulk sale clearance certificate. A purchaser that does not obtain a clearance certificate from the Department is liable for any and all unpaid tax liabilities of the seller up to the date of transfer. Taxpayers acquiring assets from another business should familiarize themselves with the Commonwealth’s bulk sale provision in order to avoid unwelcome tax bills.
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This advice is not intended or written to be used for, and it cannot be used for, the purpose of avoiding any federal tax penalties that may be imposed, or for promoting, marketing or recommending to another person, any tax related matter.