- June 29, 2010
- All New Jersey Issuing Offices
- NJ Bulk Sales Reporting Requirement Applicable to Real Estate used in Business
The NJ Division of Taxation has the power to impose personal liability upon a purchaser of business assets for taxes the seller may owe, which business assets include real estate used primarily to support the seller's business on its premises. In order to avoid personal liability, the purchaser must provide timely notice of the sale at least 10 days prior to taking possession of the assets. While this is not a title insurance issue, NJ issuing offices may wish to note the applicability of N.J.S.A. 54:50-38 when insuring title to business premises, which include residential rental properties in addition to traditional commercial uses.
NJ Division of Taxation Technical Bulletin TB-60 sets forth the instructions and form of Notice [Form TTD] where real property used in business is being sold in addition to the standard Bulk Sale Transfer Form C-9600 traditionally used for the sale or transfer of tangible or intangible business assets.
Under the terms of N.J.S.A. 54:50-38, once the purchaser provides the 10 day notice of sale to the Director, by registered mail, the Director has 10 days to notify the purchaser of any claim for taxes due and advise of any escrow sum required. Customarily, business tax issues and notice requirements are addressed and attended to between counsel for the purchaser and the seller. While these issues are beyond the scope of title insurance coverage, this Bulletin is intended to alert those issuing offices who choose to conduct settlements of the recent developments in New Jersey regarding bulk sale notice requirements pertaining to the sale of real property used in business. Transaction specific questions should be directed to the Bulk Sale Section of the NJ Division of Taxation at: 609-292-6604.
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