Successor Liability and Clearance Certificates

  1. What is meant by successor liability?

  2. If I am responsible for successor liability, what do I have to pay?

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

  4. If I buy most of the assets of a business (e.g., equipment, furniture, inventory) but not the entire business, could I be held personally liable for the unpaid taxes of that business?

  5. I am in the process of purchasing a business. Can the department provide me the seller's sales and use tax information so I know how much to withhold from the sale to cover the liabilities?

  6. If I am taking over a business and there is no purchase price, am I still subject to successor liability?

  7. The seller of a business has several locations. I have purchased only one location. Am I responsible for what is owed at all locations?

  8. Am I still responsible for successor liability if the seller and I write up a contract that says that the seller will pay all liabilities?

  9. What is a clearance certificate?

  10. What is needed in a request to obtain a clearance certificate?

  11. How long will it take to receive the clearance certificate once the request has been submitted?

  12. Will I receive a clearance certificate once all sales and use tax returns are filed and sales and use tax is paid?

  13. Who will receive a copy of the clearance certificate when it is issued?

  14. I haven't sold my business yet but I would like a certificate stating that all of my state taxes are paid. Can I still get a clearance certificate?

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


Applicable Laws and Rules

This document provides statements or interpretations of the following laws and regulations in effect as of December 30, 2019: Sections 73.03, 77.52, 77.58 and 77.61, Wis. Stats., and secs. Tax 11.002 and 11.91, Wis. Adm. Code.

Laws enacted and in effect after December 30, 2019, new administrative rules, and court decisions may change the interpretations in this document. Guidance issued prior to December 30, 2019, that is contrary to the information in this document is superseded by this document, pursuant to sec. 73.16(2)(a), Wis. Stats.

FOR QUESTIONS OR COMMENTS CONTACT:

WISCONSIN DEPARTMENT OF REVENUE
Successor Liability Assistance
PO Box 8901 Mail Stop 4-CMP-W
Madison, WI 53708-8901
Phone: (608) 267-0833
Fax: (608) 224-5700
Email additional questions to DORSpecialProcedures@wisconsin.gov

Guidance Document Number: 100042

December 30, 2019