Anyone successfully complete the sales/purchase process in Pennsylvania recently?

September 16, 2025

by a searcher from Saint Joseph's University - Erivan K. Haub School of Business in Mt Laurel, NJ, USA

not looking for legal advice, although I am possibly skirting the line. running into an issue where bank's lawyer is requesting PA Bulk Sales Tax Clearance certificate prior to closing. However, from what I can tell, that certificate is meant to be issued after a business is closed, and allows the seller to close out that business's tax account. The seller's business remains operating until the sale, and the seller's existing business tax account is current. I sort of understand the bank's position, they don't want any liens on the business assets being purchased. But the purchase agreement indemnifies the buyer and seller companies against tax liabilities of the other, and the buyer is purchasing fixed assets, lease of property, inventory, and goodwill. So can that certificate be issued prior to a sale?

Reply by a professional
from Allegheny College in Philadelphia, PA, USA

Usual disclaimer - I'm an attorney, not your attorney, and don't know all the facts of your deal. The PA Bulk Sales Tax Clearance process can take months. NJ is faster. In PA, we typically include indemnification language and waive the obligations to complete prior to close. If you have a Seller's note, then you have something to set off against if something hits the fan (assuming you address that right to set off in the note). Is lender's counsel in PA? You may need more refined language around the clearance and indemnification obligations to get them comfortable.

Reply by a searcher
from Sherman College of Straight Chiropractic in New Holland, PA 17557, USA

DISCLAMIER I AM NOT an ATTORNEY: stay with the following and verify the following information: As you probably are aware already that The Bulk Sales Tax Clearance Certificate (often called “Tax Clearance”) is issued by the PA Department of Revenue. It certifies that the seller of a business has paid or provided for all Pennsylvania state taxes (sales tax, employer withholding, corporate net income tax, et cetera) up to the date of the sale. The purpose is to protect the buyer: under PA law, if the seller owes taxes, the buyer can become liable for those unpaid taxes if no clearance certificate is obtained. Without the certificate, the buyer may inherit the seller’s unpaid tax liabilities. (ALWAYS MITIGATE THE RISKS WHERE YOU CAN) The state can place a lien on the assets being transferred if taxes are outstanding. Most buyers (and their ATTORNEYS) will require it as a condition of closing. Before the Sale (USUALLY is Best Practice): The buyer should request that the seller apply for and obtain the certificate before closing. That way, both parties know there are no hidden tax liabilities. After the Sale (INCREASING RISK ALGORITHM POTENTIALLY EXPONETIALLY): The certificate can TECHNICALLY be applied for AFTER the transaction, THOUGH: It exposes the buyer to potential liability if taxes are discovered in the interim. (ALWAYS MITIGATE THE RISKS WHERE YOU CAN) Buyers often withhold part of the purchase price in escrow until the certificate is delivered, to cover any possible tax claims. The seller applies using Form REV-181 – Application for Tax Clearance Certificate. The PA Department of Revenue reviews all accounts, then issues the certificate if everything is satisfied. This process can take several weeks, depending on tax complexity. IT WOULD BE highly recommended to obtain the Bulk Sales Tax Clearance Certificate before closing. It protects the buyer, avoids escrow complications, and ensures the seller is fully compliant with Pennsylvania tax law. DICLOSURE: VERIFY ALL INFORMATION PROVIDED HERE. Thank you, Luke for the tag - interesting topic

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