Sales and Use Tax
Buying a Business - Successor's Liability

  1. If I buy an existing business will I be liable for any unpaid sales and use taxes of the seller for that business?
  2. If I buy an existing business will I need a new seller's permit?

  1. If I buy an existing business will I be liable for any unpaid sales and use taxes of the seller for that business?

    The purchaser of a business (the successor) is liable for any unpaid sales and use taxes of the seller for that business. The purchaser should withhold a sufficient amount from the purchase price to cover any unpaid sales and use taxes of the seller.

    The purchaser can check the Circuit Court Access for delinquent tax warrant filing and satisfactions. The department cannot divulge information of outstanding potential successor liabilities prior to the business closing.

    After the sale has taken place, the purchaser may request a "Sales and Use Tax Clearance Certificate" indicating that all Wisconsin sales and use tax liabilities of the seller for that business are satisfied.

    For additional information see Clearance Certificate.

  2. If I buy an existing business will I need a new seller's permit?

    A seller's permit is required for every individual, partnership, corporation or other organization making taxable sales, or providing taxable services in Wisconsin, unless all sales by the seller are exempt from sales and use tax.

    For additional information see What Is Taxable.

    If you buy an existing business that is required to hold a seller's permit, the seller's permit cannot be transferred to you. You must apply for a new permit. To apply online, go to Online Services, and click on 'Register for Wisconsin tax permit'.

    For additional information see Sales and Use Tax Permits.

FOR MORE INFORMATION PLEASE CONTACT:

WISCONSIN DEPARTMENT OF REVENUE
Customer Service Bureau
Mail Stop 5-77
PO Box 8949
Madison, WI 53708-8949
Phone: (608) 266-2776
Fax: (608) 267-1030
Email additional questions to DORSalesandUse@revenue.wi.gov

January 3, 2014