Current through Register Vol. 46, No. 12, March 20, 2024
(a) General. A
notice of a sale, transfer or assignment in bulk of business assets from a
purchaser must be in substantial compliance with section
1141(c) of the Tax Law in
order for the 90-day period (for the giving of notice by the Division of
Taxation of the total amount of the taxes due) to commence. The Department of
Taxation and Finance, in its sole discretion, may waive any defect in the
service, timeliness or contents of a notice of sale, transfer or
assignment.
(b) Service.
(1) Such notice of a sale, transfer or
assignment in bulk shall be given by the purchaser, transferee or assignee by:
(i) personal service (hand delivery), upon
persons authorized by the Department of Taxation and Finance to accept such
service, at the Bulk Sales Unit, Central Office Audit Bureau, Audit Division,
Department of Taxation and Finance, State Campus, Albany, NY; or
(ii) United States registered mail to the
Bulk Sales Unit, Central Office Audit Bureau, Audit Division, Department of
Taxation and Finance, State Campus, Albany, NY 12227; or
(iii) United States certified mail--return
receipt requested, to the Bulk Sales Unit, Central Office Audit Bureau, Audit
Division, Department of Taxation and Finance, State Campus, Albany, N.Y. 12227;
provided that the envelope or other wrapper containing the notice is delivered
to an employee of the United States Postal Service who postmarks the sender's
receipt for such envelope or wrapper.
(2) If service of the notice does not comply
with the provisions of paragraph (1) of this subdivision, service shall be
deemed defective, and the notice of no force and effect, unless and until such
notice is actually received by the Bulk Sales Unit, Central Office Audit
Bureau, Audit Division, State Campus, Albany, NY 12227. The burden of showing
that such notice was actually received is on the purchaser. The fact that the
notice was actually mailed or delivered to a post office is not sufficient to
overcome the burden, nor may the purchaser rely on the presumption of
regularity of the mail service.
(c) Timeliness.
(1) If by personal service, such service must
be made at least 10 days prior to the taking of possession of or payment for
such sale, transfer or assignment, whichever comes first.
Example 1:A person purchasing business assets in bulk will
take possession of the assets and pay for the same on April 30, 1982. On April
20, 1982 he serves the notice of sale by having such notice hand-delivered to
an employee of the Department of Taxation and Finance who has been authorized
by the department to accept such service. Since the notice was personally
served 10 days before the taking of possession and making payment, the notice
is timely.
(2) If mailed by
United States registered mail or United States certified mail--return receipt
requested, with a sender's receipt postmarked by an employee of the United
States Postal Service, the notice must be mailed at least 10 days prior to the
taking of such possession or payment, whichever comes first.
Example 2:A person purchasing business assets in bulk will
take possession of the assets and pay for the same on April 30, 1982. He mails
the notice of sale by certified mail--return receipt requested, the sender's
receipt for which is postmarked on April 15, 1982. Because of delay in the
mails, such notice is not received by the Bulk Sales Unit, Central Office Audit
Bureau, Audit Division, until April 23, 1982. Since the notice is mailed by
certified mail--return receipt requested, and the sender's receipt is
postmarked by an employee of the United States Postal Service, the date of
mailing and not the date of receipt governs. Accordingly, the notice is
timely.
(3) If mailed by
ordinary mail, certified mail--return receipt requested, without a postmarked
sender's receipt, or certified mail with no return receipt requested, the
notice must actually be received by the Bulk Sales Unit, Central Office Audit
Bureau, Audit Division, Department of Taxation and Finance, State Campus,
Albany, NY 12227 at least 10 days prior to the taking of possession or payment,
whichever comes first.
Example 3:Assume the facts in example 2, except that a
return receipt is not requested or that the sender's receipt is not postmarked
by an employee of the United States Postal Service. Therefore, the date of
receipt governs the timeliness of the mailing. Since the notice is not received
within 10 days before the taking of possession and making payment, the notice
is untimely.
(4) The
payment by the prospective purchaser to the seller of an amount which is
nominal in relation to the selling price in order to bind the transaction is
not deemed party payment for the purposes of this subdivision. However, if
payment is made pursuant to a legally binding contract, such deposit
constitutes part payment.
Example 4:A business places an advertisement in the
newspaper offering the sale of its business assets at an asking price of
$250,000. In response to the advertisement a prospective purchaser signs a
binder with the seller's agent and deposits $250 with the agent to bind the
transaction. The details, including the exact items to be sold, are to be set
forth in a contract to be subsequently entered into between the parties. The
deposit of $250 does not constitute part payment for the sale.
(5) When the 10th day prescribed
falls on a Saturday, Sunday or day which is a legal holiday in the State of New
York, the notice will be considered timely if it is given on the next
succeeding day which is not a Saturday, Sunday or legal holiday.
Example 5:A person purchasing business assets in bulk will
take possession of the assets on February 23, 1982. The 10th day before that
date, February 13th, falls on Saturday. The next day is Sunday, and the next
day is a legal holiday in New York State (Washington's birthday). The purchaser
mails the notice by registered mail on Tuesday, February 16, 1982. The notice
is timely.
Example 6:Assume the same facts in example 5, except that
the purchaser makes personal service on Tuesday, February 16, 1982. The notice
is timely.
Example 7:Assume the facts in example 5, except that the
purchaser mails the notice by ordinary mail and the notice is actually received
on Tuesday, February 16, 1982. The notice is timely.
(6) Every notice received more than 10 days
prior to either the scheduled date of sale required to be set forth in the
notice pursuant to subparagraph (d)(1)(iv) of this section, or the actual date
of sale shall be deemed to have been received on the 10th day prior to the
later of:
(i) such scheduled date of sale;
or
(ii) the actual date of sale
(i.e., the earlier of the date of taking possession of or the date of payment
for the business assets).
Example 8:The purchaser of a business files a notice of
sale with the department on February 9, 1990 which indicates the scheduled date
of sale as June 18, 1990. The notice of sale, although received by the
department on February 9, 1990 is deemed to have been received on June 8, 1990,
10 days prior to the date of sale indicated by the purchaser in the notice of
sale.
(d) Contents.
(1) Such notice is required to set forth:
(i) the names and mailing addresses of the
purchaser, seller and escrow agent, if any;
(ii) the purchaser's certificate of authority
identification number, if any, name and each business location;
(iii) the seller's certificate of authority
identification number, name, trade or business, trade or business name and each
business location (whether or not all such locations are the subject of the
bulk sale);
(iv) the scheduled date
of sale;
(v) the total sales price
of business or property;
(vi) the
breakdown of the total sales price into the sales price paid for ( a) goodwill,
(b) accounts receivable, (c) notes receivable, (d) mortgages, (e) securities, (
f) furniture and fixtures, (g) motor vehicles, ( h) manufacturing equipment,
(i) other equipment, ( j) inventory, and (k) real property. If the sales price
is indivisible and not applicable to any of the items, the total fair market
value of the items in each category should be set forth;
(vii) the amount of escrow funds;
(viii) the location and type of business or
property transferred; and
(ix) the
terms and conditions of the sale, such as method of payment, schedule of
payment or inventory of items.
(2) A preprinted notice of sale, transfer or
assignment in bulk of business assets is available upon request from the
Taxpayer Assistance Bureau, Department of Taxation and Finance, State Campus,
Albany, NY 12227, or from the Taxpayer Assistance Bureau at any district office
of the Department of Taxation and Finance.
(e) Revised notices.
(1) A purchaser who has previously filed a
notice of sale with the Department of Taxation and Finance must file a revised
notice with the department if any of the information which was required to be
included in the original notice, in accordance with subdivision (d) of this
section, changes, was incorrect or was not available at the time the original
notice was filed.
(2) Every revised
notice of sale filed with the department is subject to all the rules set forth
in this section as to service, timeliness and contents.
(3) Where any item of information required to
be contained in a revised notice of sale differs from the information contained
in a prior notice of sale, the information contained in the revised notice will
prevail. Where an item of information required to be contained in a revised
notice is omitted but was included in a prior notice, the information will be
considered to be unchanged. The date of receipt or, if applicable, the deemed
date of receipt, of the revised notice will determine the dates by which the
department must fulfill its obligations under subdivisions (a) and (c) of
section
537.6
of this Part.
Example 9:Assume the same facts as in Example 8 of this
section, except that on April 4, 1990 the purchaser files a revised notice of
sale with the department stating that the sale will now take place on May 11,
1990. The department will now deem the date of receipt of the notice to be May
1, 1990, the tenth day prior to the new scheduled date of sale.
Example 10:Assume the same facts as in Example 8 of this
section except that on April 4, 1990 the purchaser files a revised notice of
sale stating that the sale actually took place on March 12, 1990. The date of
receipt of the revised notice, April 4, 1990, will be used by the department in
determining the dates by which it must fulfill its obligations under
subdivisions (a) and (c) of section
537.6
of this Part.
