Section 3090. Sale or quitting of business; successor business

A. Sale or quitting business, final return. If any dealer liable for any tax, penalty or interest sells his business or stock of goods or quits the business, he must make a final return and payment within 15 days after the date of selling or quitting the business. At that time, he must also return his Certificate of Registration to the Department of Taxation and include a letter explaining the situation. He must report on his final return the full name and address of any successor.

B. Liability of successor business for unpaid taxes. If a sale of a business for a consideration occurs, the dealer's successors or assigns, if any, must withhold a sufficient portion of the purchase money to cover the amount of any taxes, penalties and interest due and unpaid until the former owner produces either a receipt from the Department of Taxation showing that payment has been made or a certificate stating that no taxes, penalties or interest are due. If the purchaser of a business or stock of goods fails to withhold a sufficient portion of the purchase money, he becomes personally liable for the payment of the taxes, penalties and interest due and unpaid by any former owner. This section does not qualify or limit the exemption from the sales tax of an occasional sale as defined in 23VAC10-210-1080 nor does it intend to imply successor liability where no "sale" of a business occurs.

C. Application of successor business for Certificate of Registration. Any person, firm or corporation who succeeds a dealer in the operation of a business must apply for a Certificate of Registration. When applying for a Certificate of Registration, the successor dealer must inform the department of the acquisition of the business previously operated and furnish the name and certificate number of the previous dealer. The successor may request a receipt of certificate from the department showing the amount of tax, or no tax, due by the previous dealer. Such a receipt or certificate will be sufficient evidence to authorize the successor to release to the previous dealer any funds withheld from the purchase price. A Certificate of Registration may not be issued to a successor who has been notified by the department that any tax, penalty or interest is due and unpaid by previous dealers until such amount is paid in full.

Historical Notes

Derived from VR630-10-94; revised January 1, 1979; amended, eff. January 1, 1985.

Statutory Authority

§§ 58.1-203 and 58.1-629 of the Code of Virginia.