Current through Register Vol. 49, No. 18, September 16, 2024
PURPOSE: Section
144.150,
RSMo makes a person acquiring a business, or the stock of goods or assets of a
business, liable for the seller's tax liability. This rule explains how that
liability is incurred and what steps must be taken in order for a purchaser to
be relieved of this liability.
(1) In general, any purchaser of
substantially all of a business or stock of goods of a business is liable for
the seller's tax liability. The purchaser is required to withhold and remit to
the department sufficient purchase money to pay the seller's tax liability upon
the purchase of the business or stock of goods. The purchaser is relieved of
liability by receiving from the seller a receipt from the director of revenue
showing that the taxes have been paid.
(2) Definition of Terms.
(A) Purchase money-any consideration flowing
directly, or indirectly through intermediate parties or otherwise, to a seller
and is not limited to actual cash transferring directly to the
seller.
(B) Stock of goods-the
amount of movable personal property and/or inventory of a business.
(C) Purchaser-any "person" as defined in
section 144.010.1(6), RSMo who, directly or indirectly, purchases substantially
all of a business or stock of goods.
(3) Basic Application.
(A) Any person acquiring a business should
require the seller to provide a receipt from the department stating that all
taxes have been paid or a certificate of no tax due issued by the department.
The purchaser can rely on the department's certificate of no tax due for one
hundred twenty (120) days from issuance.
(B) If the seller does not provide a receipt
or certificate of no tax due from the department, the purchaser must pay any
tax due. The purchaser should withhold a sufficient amount of the purchase
money to cover taxes, interest and penalties due and unpaid by all former
owners or predecessors, whether immediate or not. If the purchaser does not
withhold and remit a sufficient amount, the purchaser is personally liable for
the unpaid taxes, interest, additions to tax and penalties accrued. To
determine the amount to be withheld, the purchaser should require the seller to
provide a statement from the department showing the amount of taxes, interest,
additions to tax or penalties due and owing, including the date of the last
payment for such taxes, interest, additions to tax or penalties.
(C) A purchaser who obtains a certificate of
no tax due or withholds and pays the department a sufficient amount of the
purchase money to cover the amount of tax, interest, additions to tax and
penalties is not liable for additional tax owed as the result of a subsequent
audit of the tax periods covered by the previous owner. The previous owner
remains liable for the tax.
(D) Any
creditor acquiring the business or stock of goods as a result of an enforcement
action, or any immediate or subsequent purchaser from such creditor, is not
liable for the taxes, interest, additions to tax and penalties of the previous
owner. The previous owner remains liable.
(E) Reliance on an affidavit pursuant to
Missouri's Bulk Transfer Act stating that there were no creditors of the
business will not relieve a purchaser from a previous owner's tax
liability.
(4) Examples.
(A) A taxpayer purchased an ice cream
business. The previous owner had a tax liability with the department. The
taxpayer required the previous owner to provide a statement from the department
listing the amount owed. The taxpayer withheld the amount of the tax liability
from the purchase price. The previous owner then provided a statement from the
department showing the tax had been paid. The taxpayer is relieved of any
liability and may pay the balance of the purchase price to the previous owner.
If the previous owner had not provided the statement, the taxpayer would have
been required to remit the withheld money directly to the department.
(B) A motel owner with an accrued tax
liability of $18,000 defaulted on a loan. The lender acquired the motel in a
private settlement with the owner. A taxpayer subsequently purchased the motel
from the lender without receiving from the lender a receipt from the director
of revenue showing that the amount of taxes, interest to date and penalties
have been paid or a certificate stating that no taxes were due. The lender and
the taxpayer are personally liable for the unpaid tax, penalty and interest to
date on the motel. If the lender had acquired the motel through an enforcement
action, the taxpayer would not have been liable for the previous owner's
tax.
(C) A taxpayer acquired a car
and some records from a business, which were not substantially all of the
business or stock of goods of the business. The taxpayer is not liable for any
tax liability of the previous owner.
*Original authority: 144.150, RSMo 1939, amended 1941,
1943, 1945, 1961, 1987, 1990, 1994 and 144.270, RSMo 1939, amended 1941, 1943,
1945, 1947, 1955, 1961.
