The liability of the successor or purchaser of a business or stock of goods extends to amounts incurred related to the operation of the business by the predecessor and any former owner. Also included is the yet to be determined taxes, interests, and penalties even for nonpayment of taxes. Liability also extends to penalties determined and unpaid at the time of sale for negligence or intentional disregard of the Sales and Use Tax Law or authorized rules and regulations or intent to evade any of the previously mentioned.
In addition to issuing a notice of successor liability, the BOE also has the power to attach a lien to any assets available to satisfy the tax liability. This includes placing a lien on any or all of the proceeds placed in escrow to complete the purchase or sale of a business. Since these funds a readily available the BOE is highly motivated to go after them because from the state’s perspective if the amount due is not paid at time of sale it may never collect.
