Start your tax clearance preparation with Albuquerque Business Brokers Edge and bring the questions below to the people helping you prepare.
Know whose request it is
The state identifies Form ACD-31096 as the Tax Clearance Request. A successor buying or otherwise obtaining a business may request clearance to address the former operator’s tax position.
That is different from assuming a seller’s statement that all taxes were paid settles the matter. Have the transaction team identify the correct request and parties for the actual deal.
Coordinate clearance with closing
Give your advisors the tax account details and records they need through a secure process. Do not put account numbers or returns into the initial valuation form.
Ask the closing team how any outstanding liability, purchase money withholding or unresolved request will be handled. Use the current state instructions and the purchase agreement together.
A clearance question can affect timing even when the company is profitable. Raise it early enough for your accountant and attorney to review the response.
Keep separate documents separate
A tax clearance request, a letter of good standing and closure of a tax account serve different purposes. Do not substitute one simply because its name sounds similar.
This overview is preparation for a discussion with your advisors. They should verify the current form, deadlines and application to your transfer before you file or release funds.