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What is a Bulk Sale and why must it be reported to the New Jersey Division of Taxation? The purpose of the Bulk Sale Statute is to protect a purchaser from inheriting any tax debt from a seller of business assets.
Notification of Sale, Transfer, or Assignment in Bulk. Attach Executed Copy of Pending Contract of Sale or Transfer. This form is to be used by the purchaser/transferee to notify the Director of the Division of Taxation of any bulk transfer in accordance with N.J.S.A. 54:50-38.
To collect the proper taxes, the purchaser must notify the Division anytime there is a bulk sale. Assets subject to bulk sale may include: Tangible property such as inventory or materials; Real property (land, buildings etc.); and. Intangible assets, such as goodwill.
The New Jersey Bulk Sale Act (N.J.S. 54:50-38) (the “Bulk Sale Act”) applies to many types of transactions and can expose purchasers, transferees and assignees (each a “Purchaser”) to all of a seller’s State tax liabilities. Questions or comments?
The New Jersey Bulk Sales Law (Bulk Sale Statute) applies to transactions involving the sale, transfer or assignment in bulk of business assets of any part or whole of the person’s business assets, other than in the ordinary course of business.
According to the New Jersey State Department of the Treasury, Tax Division, the bulk sales laws are designed to protect the purchasers of business assets from unfair tax liabilities. With that in mind, the first trick is to understand what is considered a bulk sale.
The State of New Jersey Bulk Sales Law (N.J.S.A. 54:50-38) protects purchasers from tax debt from the seller of business assets when the sale is outside the normal course of business. Bulk sales include the sale of real property, tangible property such as inventory or materials and intangible assets like goodwill.