Buying a Business? Beware Successor Tax Liability

Buying a business is a fun way to get into biusiness quickly.  To be successful, however, there are lot's of factors to consider and many details to check.
     A little-known risk in a business purchase is that a buyer might be liable for the unpaid taxes of a former owner after a business purchase.
     Most states, including Washington, have provisions to hold a new owner accountabe for state taxes owed by a previous owner. To protect against a very unpleasant surprise after a business purchase, always require that the seller provide a Tax Status letter to determine any outstanding taxes owed by the business.
     General discussion of avoiding successor liabilities from the ABA can be found by reading Avoiding Successor Tax Liability in a Sale of Business Assets  from Protecting the Purchaser's Interests by Raymond P. Carpenter Sr.
     Here is Washington State, the successor tax law is WAC 458-20-216 Successors, quitting business, which states in part, "A taxpayer is required to remit any outstanding tax liability to the department of revenue within ten days of quitting or selling a business. Any successor to the taxpayer becomes liable for the outstanding tax."  Ugh!
     For your financial safety, learn when a person is considered a successor, the successor's responsibilitys and review examples of successorship.
     Want to buy a busines? Let's go over the details, I'm ready to work with you! Call (360) 865-4938