California Sales and Use Tax Provisions

The Sales and Use Tax Law is relevant to the transfer of a retail business which sells tangible personal property. Of particular importance are:


  • A “clearance receipt” confirming payment of state and local sales taxes so that the buyer is protected from “successor’s liability”;
  • Releases or subordination agreements covering sales tax liens against real or personal property; and
  • The tax liability on that portion of the sale price allocated to the personal property to be used in the business.