Texas § TX.111.020 - TAX COLLECTION ON TERMINATION OF BUSINESS

§ TX.111.020. TAX COLLECTION ON TERMINATION OF BUSINESS

TAX COLLECTION ON TERMINATION OF BUSINESS. (a) If a person who is liable for the payment of an amount under this title sells the business or the stock of goods of the business or quits the business, the successor to the seller or the seller's assignee shall withhold an amount of the purchase price sufficient to pay the amount due until the seller provides a receipt from the comptroller showing that the amount has been paid or a certificate stating that no amount is due. (b) The purchaser of a business or stock of goods who fails to withhold an amount of the purchase price as required by this section is liable for the amount required to be withheld to the extent of the value of the purchase price. (c) The purchaser of a business may request, on an affidavit or other form prescribed by the comptroller, that the comptroller issue a certificate stating that no tax is due or issue a statement of the amount required to be paid before a certificate may be issued. The comptroller shall issue the certificate or statement within 60 days after receiving the request or within 60 days after the day on which the records of the former owner of the business are made available for audit, whichever period expires later, but in either event the comptroller shall issue the certificate or statement within 90 days after the date of receiving the request. (c-1) Section 111.006 (a) does not apply to the disclosure of information under Subsection (c). (d) If the comptroller fails to mail the certificate or statement within the applicable period provided by Subsection (c) of this section, the purchaser is released from the obligation to withhold the purchase price or pay the amount due. (e) A period of limitation during which the obligation of a purchaser under this section may be enforced begins when the former owner of the business sells the business or stock of goods or when a determination is made against the former owner, whichever event occurs later. (f) Compliance with Subsection (a) is not a defense to an assessment of tax liability under Section 111.024 if: (1) the amount withheld from the purchase price is not sufficient to fully satisfy the liability of the seller of the business or stock of goods; and (2) the purchase price paid to the seller for the business or stock of goods is not reasonably equivalent to the value of the business or stock of goods. Added by Acts 1987, 70th Leg., 2nd C.S., ch. 1, Sec. 5, eff. July 21, 1987. Amended by Acts 2001, 77th Leg., ch. 442, Sec. 3, eff. Sept. 1, 2001. Amended by: Acts 2021, 87th Leg., R.S., Ch. 377 (S.B. 873 ), Sec. 1, eff. September 1, 2021.