Ask for the paper, not the promise: the seller's sales-tax certificate in Florida

In Florida, if you buy more than half of a business, you can become liable for the seller's unpaid sales tax. Before you pay, ask the seller for one paper: a Certificate of Compliance from the Florida Department of Revenue. A promise in the contract that "all taxes are paid" is not that paper.

General information, not legal or tax advice.

The rule, in the statute's words

The rule is Florida Statutes section 213.758. A buyer of "more than 50 percent of a business, assets of a business, or stock of goods of a business" "is liable for any unpaid tax owed by the transferor arising from the operation of that business unless" one of two things happens, so buying the assets instead of the company does not avoid it. The Department of Revenue's own page says it plainly: "the purchaser could be liable for what is owed in relation to the business."

Subsection (4)(a) names two ways out:

1. The seller "provides a receipt or certificate of compliance from the department" to you, and there were "no insiders in common" between seller and buyer at the time of the transfer. Your lawyer checks who counts as an insider.
2. The Department "finds that the transferor is not liable" (the transferor is the seller) after an audit.

Subsection (8) adds narrow exclusions, such as involuntary transfers.

How much you can owe: "the fair market value ... or the total purchase price paid ..., whichever is greater", both counted net of liens, with some exceptions. You and the seller are liable jointly and severally: the state can collect the tax owed from either of you, from you up to the cap above. In this statute "tax" also covers reemployment tax, which employers pay under chapter 443, but not corporate income tax.

What the certificate proves, and what it does not

The Department calls it "proof the Department has not issued a Notice of Intent to Audit Books and Records and there are no outstanding liabilities on their account."

Two limits:

• It shows the seller's position at "a point in time". "If a significant amount of time lapses between issuance of the certificate and the sale, a new certificate may be requested."
• A Tax Clearance Letter is a different paper, requested through the same online form. It is used for certain federal grants or loans and "does not exempt the business from future audits". If the seller hands you one, ask again for the Certificate of Compliance.

Who asks for it, and how long it takes

Tax information is confidential, so the request must come from someone listed with the Florida Division of Corporations as connected to the company, or holding a power of attorney on form DR-835. In practice that means the seller, or someone the seller authorizes.

The Department's time: "7-10 business days from the date the Department receives your request." Ten business days is two calendar weeks without holidays. Ask for the certificate when you sign the letter of intent, not in the week of closing.

If the seller cannot or will not get one

An audit. The seller files form DR-842, or you file form DR-843 with the signed sales agreement. The statute gives the Department 90 days "after the records are made available". The results go to the seller only: "the Department will provide only the seller with the audit results and transferee liability certificate".

Holding back part of the price. "A transferee may withhold a portion of the consideration ... to pay the tax owed to the state by the transferor taxpayer", and must pay it to the state "within 30 days after the date of the transfer". While the sale is pending, the Department suggests the seller holds "an amount in escrow equal to any potential liability".

Our reading of the statute: a holdback is not listed among the two ways out in (4)(a). Paying the withheld money to the state pays that part of the debt, and if the amount withheld is less than the seller's liability, "the transferor remains liable for the deficiency". Whether and how far a holdback protects you in your deal is a question for your lawyer.

What to put in the letter of intent and the contract

Points to raise with your lawyer:

• make a Certificate of Compliance, dated close to closing, a condition of closing, with a new one if the date slips;
• tie your deposit to it: no certificate, deposit back;
• confirm in writing that no insider is on both sides;
• if there is an audit, require the seller to hand you its results and the transferee liability certificate;
• set the size of any holdback or escrow, who holds it, and when it goes to the state;
• oblige the seller to file the final return and pay "within 15 days after the date of transfer", as the statute requires.

A check you can do yourself first

A sales-tax warrant recorded by the clerk of the circuit court of the county becomes "a lien on any real or personal property of the taxpayer in the same manner as a recorded judgment" (section 212.15). Search the Official Records of the county where the business has property, under the seller's exact legal name. A warrant you find is a question for the seller. A clean search does not replace the certificate: it shows only what is already recorded.

Other states use other papers and deadlines.

The next step

If you want a check before the deposit, you can order one from us: the €550 report. The price and how to order are on our pricing page.

Sources

1. Florida Statutes 2026, s. 213.758 (transfer of tax liabilities) (retrieved 3 October 2026)
2. Florida Department of Revenue, Verifying Business Account Status (Tax Clearance) (retrieved 3 October 2026)
3. Florida Department of Revenue, Form DR-842, Seller's Application for Transferee Liability Certificate (retrieved 3 October 2026)
4. Florida Department of Revenue, Form DR-843, Purchaser's Application for Transferee Liability Certificate (retrieved 3 October 2026)
5. Florida Statutes 2026, s. 212.15 (sales tax warrants become a lien) (retrieved 3 October 2026)
6. Florida Statutes 2026, s. 213.053 (confidentiality of tax information) (retrieved 3 October 2026)
7. Florida Department of Revenue, Form DR-835, Power of Attorney and Declaration of Representative (retrieved 3 October 2026)