Section 152.095. Successor liability.

 

(1)   G ENERAL . If any licensee liable for any amount of tax and interest under this subchapter sells the licensee's business, substantially all the assets of the business or quits the business, the licensee's successor shall withhold a sufficient amount of the purchase price to cover such amount until the former licensee produces a receipt from the department that it has been paid or a certificate stating that no amount is due. If any taxes and interest are due, the licensee's successor is personally liable for the payment of the amount required to be withheld to the extent of the purchase price.

(2)   Definitions. In this section:

(a)

1. "Successor" includes any of the following:

a. A purchaser or assignee of a business or assets of a business.

b. A creditor, including a financial institution, that actually operates the business or part of the business which has been voluntarily surrendered by a delinquent debtor in full or partial liquidation of the debt.

2. "Successor" does not include:

a. A surviving joint tenant where the business or assets passes by law to the remaining joint tenant.

b. A financial institutional or mortgagee who forecloses on a loan to a licensee owing delinquent tax.

c. A personal representative, special administrator or the licensee's estate.

(b) "Purchase price" includes all of the following:

1. Consideration paid for tangible personal property and for intangibles such as leases, licenses and good will.

2. Fair market value or property received for tangible personal property and for intangibles such as leases, licenses and good will.

3. Debts assumed by the purchaser, or canceled by a creditor.

(3)   Extent of liability.

(a) If there is no purchase price, there shall be no successor's liability.

(b) A successor shall be liable to the extent of the purchase price.

(c) A successor shall be liable only for the amount of tax and interest and not for penalties. The successor's liability shall not bear interest after the purchase date.

(d) A successor's liability is determined by law and may not be altered by agreements or contracts between the buyer and the seller.

(4)   Procedures for purchasers.

(a) A purchaser shall withhold a sufficient amount from the purchase price to cover any fuel use tax and interest liability.

(b) The purchaser shall submit a written request to the department for a clearance certificate. The letter requesting the certificate shall include the licensee's name, business name and license number, if known, of the prior operator. All fuel use tax reports for all periods shall be filed with the department before it may issue the certificate.

(c) The department has 60 days from the date it receives the request for clearance certificate or from the date that the former owner makes its records available, whichever is later, but no later than 90 days after it receives the request, to ascertain the amount of fuel tax liability, if any. The department shall, within these periods, issue either of the following:

1. A clearance certificate.

2. A notice of fuel use tax liability to the successor, which shall state the amount of tax and interest due before a clearance certificate can be issued.

(d) The department's failure to mail the notice within the 90 day period under par. (c) shall release the purchaser from any further liability.

(5)   Department's collection procedures.

(a) The department shall first direct collection actions against a licensee who sells the licensee's business, supplies or equipment.

(b) Action against the successor may not be commenced prior to an action against the predecessor unless the predecessor has no ability to pay or it appears that a delay would jeopardize collection of an amount due.

Cr. Register, May, 1997, No. 497 , eff. 6-1-97.