Avoiding Delay From Tax Clearance Certificate in Connecticut?

November 04, 2025

by a searcher from Georgia Institute of Technology - Ernest Scheller Jr. College of Business in New York, NY, USA

Has anyone here closed a business acquisition in Connecticut? My lender and attorney both say I need to obtain a Tax Clearance Certificate from the state before closing. However, the Connecticut Department of Revenue Services requires a fully executed purchase agreement to process that request — and they can take up to 60 days to issue the certificate. That means I could complete all due diligence, have lender underwriting finished, and sign the purchase agreement, yet still be forced to wait another two months to close while the tax clearance is pending. If anyone has gone through this process in Connecticut and found a way to avoid major delays caused by the Tax Clearance Certificate, I’d really appreciate your insights.

Reply by a professional
from University of Michigan in Detroit, MI, USA

Hi ^redacted‌, the key here is your lender: If your lender requires it, then you have to do it. ^redacted‌'s point is a good one. If it's just a matter of timing, you can push the purchase agreement forward and get it signed earlier. It's not ideal. I prefer to complete diligence prior to signing. But it can be done. Good luck with things!

Reply by a searcher
from Rensselaer Polytechnic Institute in Rocky Hill, CT, USA

Have not closed on a CT business yet, but the certificate is real and recommended (not required) - meaning, you risk paying leftover taxes for the business you are buying if you do not vet this final step. Under Connecticut's successor liability laws, you, as the purchaser, can be held personally liable for the seller's unpaid taxes (including sales and use taxes, admissions and dues taxes, cigarette taxes, room occupancy taxes, tobacco products taxes, and income tax withholding) up to the full amount of the purchase price.

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