5.16.130 Duties upon cessation or transfer of business – Successor liability – Personal liability.
A. A seller that ceases to engage in business in the city without a transfer of the business shall file with the city a final sales tax return, and remit any sales tax due, for the period ending on the date that the seller ceases to engage in business in the city, not later than 15 days after that date.
B. A seller that transfers its business in the city shall provide the transferee with written notice of the transferee’s obligations under subsection (C) of this section not less than 15 days before the effective date of the transfer, but neither the seller’s failure to give the notice nor the transferee’s failure to receive the notice shall relieve the transferee of any such obligation. The seller shall file with the city a final sales tax return, and remit any sales tax due, for the period ending on the effective date of the transfer, not later than 15 days after the effective date, and provide a copy of the return to the transferee. The seller shall file with the final sales tax return proof that it provided the transferee with the written notice described in the first sentence of this subsection.
C. The transferee of a business, with written consent of the owner, shall obtain from the city before the effective date of the transfer an estimate of the delinquent sales tax, penalty and interest, if any, owed by the seller as of the date of the transfer, and shall withhold that amount from the consideration payable for the transfer, until the seller has produced a receipt from the city showing that all tax obligations imposed by this chapter have been paid. A transferee that fails to withhold the amount required under this subsection shall be liable to the city for the lesser of the amount of delinquent sales tax, penalty and interest due from the seller as of the date of transfer, and the amount that the transferee was required to withhold.
D. In subsections (B) and (C) of this section, the term “transfer” includes the following:
1. A change in voting control, or in more than 50 percent of the ownership interest in a seller that is a corporation, limited liability company or partnership;
2. A sale of substantially all of the assets used in the business of the seller; and
3. The initiation of a lease, management agreement or other arrangement under which another person becomes entitled to the seller’s gross receipts from sales, rentals or services.
E. Any officers, agents, members, managers, or partners of a corporation, limited liability company (LLC), limited liability partnership (LLP), partnership, limited partnership (LP), that have control of, supervision of, or are charged with the responsibility of filing sales tax returns or remitting sales taxes are personally liable for any unpaid sales taxes, penalties, interest, fees and costs accruing and unpaid to the city. Dissolution or sale of the business or other change in the form of the corporation, LLC, LLP, partnership, or LP does not discharge this liability. The signature of any officer, member, manager, or partner on returns or negotiable instruments submitted in payment of taxes is prima facie evidence of their responsibility for remittance of sales tax. (Ord. 20-21 § 5, 2020; Ord. 16-14 § 11, 2016; Ord. 07-30 § 2, 2007; Ord. 01-38(SUB) § 2, 2001)