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  How to avoid successor liability
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Q. Can the purchaser of a business avoid successor liability?

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A. To avoid successor liability, the purchaser must obtain a Tax Clearance Certificate for sales and use taxes or admissions and dues tax, or both, before it purchases an existing business.  The purchaser of the business should request a Tax Clearance Certificate between the time the purchaser commits to buy the business and the closing.  The Department of Revenue Services (DRS) recommends that the purchaser request a Tax Clearance Certificate at least 90 days before the closing.  DRS has 60 days from the date that all required information is received to either issue a Tax Clearance Certificate or an escrow letter to the purchaser.  To obtain a tax clearance, follow the directions in IP 2002(16), Successor Liability for Sales and Use Taxes.

This answer is intended to provide general information concerning a frequently asked question about a current position, policy, or practice associated with the taxes administered by the Connecticut Department of Revenue Services.  It may include an informal interpretation of Connecticut tax law by the Department of Revenue Services (DRS).  However, it is not intended to serve as a legal ruling.

 
 
 
  
 
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