- Who handles it
- Florida Department of Revenue
- What you file
- Certificate of compliance, requested through the seller's account
- When
- Request weeks before closing, once the sale is under contract
Easy to miss: Buyers can be held liable for the seller's unpaid tax. They may ask you to hold back money until the certificate is issued.
The Problem Buyers Worry About
When someone buys a business, or more than half its assets, Florida law can make the buyer responsible for tax the seller owes. For sales tax that can include tax, interest and penalties that were never paid.
Because of that risk, good buyers and their attorneys ask for protection before they wire money.
The Certificate of Compliance
The Department of Revenue can issue a certificate of compliance saying the seller has filed its returns and paid what is due.
A buyer who holds the certificate can generally take the business free of earlier sales tax claims, though counsel should confirm how it works for your deal.
To qualify, the seller must be current. The Department usually will not issue the document if an audit is open or returns are missing.
What Sellers Should Do
- File every sales and use tax return, even if no tax was due
- Pay balances and correct errors before listing
- Ask your CPA to check for open notices or audits
- Request the certificate as soon as the contract is signed
Requests can take time, so build it into the closing schedule.
If the Certificate Is Slow
Many contracts allow the buyer to hold back part of the price in escrow until the certificate arrives, or to close with a clear process for paying any tax found later. Agree on the amount and the date it is released, in writing.
A clean record up front is the best way to keep that holdback small.
Other Taxes Follow the Same Idea
Reemployment tax and other state taxes have their own successor rules. Our page on the reemployment tax succession report covers that, and the equipment return covers local tax.
Records matter here too. If your sales are mostly cash, read proving cash revenue to a business buyer.
Asset Sales and Stock Sales
The certificate matters most in an asset sale, where the buyer starts a new account and takes the equipment, name and customers. In a stock sale the company itself, with its tax history, stays in place, so the buyer investigates the history instead.
Either way, the buyer's attorney will ask for tax returns, payment records and any state letters to see what is open.
What a Good Request Looks Like
Have your account number, your business name and the buyer's details ready. Keep copies of the most recent returns and proof of payment handy in case the Department asks for them.
If you find a mistake while preparing, fix it before you ask. An amended return filed early costs less than a delay that stalls a closing.
Sources and Advice
The Florida Department of Revenue explains successor liability and how to request the certificate, and tax attorneys publish plain summaries. This page is general information, not tax or legal advice, so have your CPA or attorney confirm the steps.
When your books are ready, request a private estimate.