Are you buying a business? Did you know that buying an existing business without verifying that the business is up to date on its taxes increases your risk of a surprise tax liability in the future? You can eliminate that risk by requesting a Successors’ Liability clearance letter.
The Successors’ Liability clearance letter verifies whether the business you’re buying has a sales/use tax debt for which you could be liable.
Request a clearance letter
The request for a Successors’ Liability clearance letter must be in writing and include the following:
- A statement affirming that you’re buying the business.
- The name, location, and seller’s permit number of the business you’re buying.
- Either:
- A statement and signature from the seller authorizing this request. This legally allows the Tax Commission to provide tax information to you, the buyer of the business, OR
- A signed copy of the purchase agreement or earnest money agreement endorsed by both parties.
Send this material to:
Idaho State Tax Commission
PO Box 36
Boise ID 83722-0410
We’ll review your request and then respond in writing to you, the buyer. We’ll let you know whether there’s a sales or use tax liability, and if so, the amount.
If there’s a debt
If the business owes any sales or use tax, you must withhold this amount from the purchase price of the business and pay it to the Tax Commission. If you don’t do this, you’ll be responsible for any sales and use taxes left unpaid by the business’s previous owner.
Laws and rules
- Successors’ Liability — Idaho Code section 63-3628
- Successor’s Liability — Sales Tax Rule 119
Note: If you need a letter of good standing, please read our Tax Clearance Certificate guide.