The State of New Jersey law requires an owner of income producing property to notify the Division of Taxation prior to closing regarding the upcoming event.
The purpose of this law is for the State of New Jersey Division of Taxation to make sure any and all monies owed by the property owner get paid to the State of New Jersey at the time of closing.
The Buyer’s attorney provides a copy of the Contract for Sale to the Division of Taxation. In the event that this is not done, the Buyer can become responsible for the Seller’s Tax obligations.
Certain forms of ownership are exempt from the Bulk Sale law requirements. For the above reasons, it is very important that a property Seller of investment property include their tax accountant in the preparation of the upcoming sales transaction.
The tax accountant can proactively identify and clean up any outstanding problems with the State of New Jersey in advance – and can thereafter provide the necessary information (to the State) in order to release the Bulk Sale Escrow quickly.
***Scillieri Best Practice Alert***
Think ahead, plan ahead and make sure your tax accountant is part of the process if you are buying or selling an income producing property.