A purchaser of a business should be aware of "successor liability," under which they become responsible for any unpaid sales and use taxes of the seller. To avoid successor liability, the purchaser may hold a sufficient amount of the purchase price in escrow until the department issues a "clearance certificate." A clearance certificate is requested by the purchaser of a business after the sale is completed and it ensures the seller has filed all sales and use tax returns and paid all sales and use taxes due.
Additional information is available on the department's common question page titled
Successor Liability and Clearance Certificates.
Applicable Laws and Rules
This document provides statements or interpretations of the following laws and regulations in effect as of September 30, 2019: Sections 77.52(18)(am) and (bm), Wis. Stats., and sec. Tax 11.91, Wis. Admin. Code.
Laws enacted and in effect after September 30, 2019, new administrative rules, and court decisions may change the interpretations in this document. Guidance issued prior to September 30, 2019, that is contrary to the information in this document is superseded by this document, pursuant to sec. 73.16(2)(a), Wis.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.
Guidance Document Certification:
Guidance Document Number: 100232