California OTA Rules Purchaser Liable as Successor for Unpaid Sales Tax of Acquired Restaurant Business

The California Office of Tax Appeals (OTA) issued a decision, holding the taxpayer liable as a successor for the unpaid sales tax liabilities. The appellant purchased a business and assets, including tangible property (equipment and inventory) and intangible assets (business name and goodwill). At the time of sale, the seller had outstanding sales tax liabilities exceeding the purchase price. The OTA found that appellant acquired the business as a going concern and failed to obtain a tax clearance certificate from the California Department of Tax and Fee Administration (CDTFA) or withhold sufficient funds from the purchase price to cover the ...