A. Successor liability is the obligation of the purchaser (successor) to withhold a sufficient amount of the purchase price to cover any sales and use tax liability, admissions and dues tax liability or withholding tax liability of the seller until the seller (predecessor) produces a receipt from the Commissioner of Revenue Services showing that any tax liabilities have been paid or a certificate stating that no amount of tax is due. Under successor liability, the purchaser of a business is liable for the taxes of the previous owner to the extent of the purchase price of the business unless the purchaser obtains a tax clearance certificate from DRS. To obtain a tax clearance, follow the directions in IP 2011(16), Successor Liability for Sales and Use Taxes, Admissions and Dues Tax, and Connecticut Income Tax Withholding.
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.