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1. Q. What is the bulk sale law?

A: In 1995, the Bulk Sale law for the protection of the purchaser and the state was enacted by P.L. 1995 chapter 161 (C54:32B-22C) and amended in 2007 by P.L. 2007, c. 100, sec. 5 (codified as N.J.S.A. 54:50-38). The law states that the purchaser, assignee or transferee of any business assets, other than in the ordinary course of business, must notify the state at least 10 business days in advance so an escrow can be established if the seller, assignor or transferor has potential tax liabilities to the Division of Taxation.

2. Q. What is a business asset?

A: The term “business” is defined to mean “any endeavor from which revenue or consideration is realized for the purpose of generating profit or loss”. A business asset can include goodwill, materials, supplies, licenses, patents, copyrights, equipment, leases, merchandise or other inventory and realty.


3. Q: What is needed from the purchaser for the notification to the Division of Taxation to be proper?

A: For the notification to be considered proper and complete the following must be provided by the purchaser.

  • A fully completed form C-9600, including:
    • valid tax ID numbers for both the seller and purchaser
    • a specific closing date
    • proper mailing addresses for both parties’ representatives
    • signed and submitted by the purchaser or their representative
  • A copy of the executed contract of sale, court order or assignment agreement clearly showing the sales price and all the terms and conditions of the transfer.
  • The C-9600 and a contract must be received by the Division of Taxation ten (10) business days prior to the closing date.
  • These documents should be submitted registered or certified mail to the Division of Taxation, Attn: Bulk Sale Section, PO Box 245, Trenton, NJ 08695-0245 or by overnight mail, Fed-Ex, or UPS to the Division of Taxation, 50 Barrack Street, Trenton, NJ  08695, Attn:  Bulk Sale Section.

Find the C-9600 here

4. Q: Is there a fee for filing the C-9600 form?

A: No

5. 5. Q: Is the 10 days prior to closing notice counted as 10 calendar days or business days? Why?

A: 10 business days (i.e. excluding weekends and holidays). This provides the Division with the time it needs to adequately research the seller’s tax status and compute the amount of escrow, if any, to be held and notify the purchaser’s attorney.

6. Q: Can the C-9600 and contract be hand-delivered or faxed to the Division?

A: No. Registered, certified or overnight mail, Fed-Ex or UPS are the only delivery options acceptable by statute.

7. Q: What if the purchaser fails to satisfy the notice requirements?

A: If the purchaser fails to notify the Division of Taxation timely or accurately, the transaction is considered a Bulk Sale Violation. This means the purchaser is now responsible for any state tax liabilities such as deficiencies, assessments on delinquent returns, and any possible assessments for future audits owed by the seller. The Division can take steps necessary to satisfy the seller’s tax indebtedness including judgment, levy and seizure of assets of the purchaser as well as the seller.

8. Q: Suppose the sellerís Tax ID number on the C-9600 is incorrect. Does that make the C-9600 incomplete?

A: No. The Division will contact the seller or his representative to request the proper ID#. If the seller fails to provide the purchaser with the correct ID#, the Division will take this factor into consideration when reviewing the notification.

9. Q: Why is a copy of a signed contract of sale, transfer or assignment required by the Division as part of the C-9600 form notice?

A: The signed contract provides the final agreement and commitment of the parties to the transaction. It gives the terms and conditions of the agreement and the authorization and obligation to provide an amount of money to be held in escrow by the purchaser.

10. Q: Proper notification was received less than ten (10) business days prior to closing. Will purchaser be protected from liability?

A: No. If the closing occurs prior to the 10 business days elapsing and the Division has not prescribed an escrow to the purchaser, it is a bulk sale violation and the purchaser will be held responsible for the tax liability of the seller.

11. Q: What happens if the date of sale or the purchase price changes?

A: The Division must be notified of the new date of sale or any change in price. The caseworker assigned will make any necessary adjustments.

12. Q: Can the seller file a C-9600 form notice if the purchaser does not want to?

A: The statute stipulates C-9600 notice must be received from the purchaser. Filing of the notice by the seller does not protect the purchaser in any way.

13. Q: Does the seller need to sign the C-9600?

A: No.

14. Q: Are any sales or transfers excluded from the bulk sale statute?

A: Yes, excluded transactions follow:

  • Any transfer of assets considered to be in the established ordinary course of the business of the seller.

Excluded: A developer buys tracts of land and builds houses to sell. This is what a developer does on a regular day-to-day basis. If the developer sells a house he built, the transfer IS NOT subject to the bulk sale statute.

Not excluded: If the developer sells some of its used building equipment to another developer, it is not part of its ordinary course of business and IS subject to the bulk sale statute.

  • Sale of stock or membership interest of an individual.  The stock/membership interest is a personalty, therefore, it is not a business asset.  *Sale of stock by a business is subject to Bulk Sale, as that the asset belongs to the business.*

Excluded: Joe Smith sells 100% of his shares in ABC, LLC to Paul Jones.
Not excluded:  Smith’s, LLC sells 100% of its shares in ABC, LLC to Paul Jones.

  • Any property obtained directly through a sheriff’s sale.
  • Sale of any one or two family residence owned by an individual (defined as a single individual, married or civil union couple), estate, or trust as defined by the Bulk Sales Amendment.

Information on the Amendment

15. Q. A purchaser files the C-9600 notice but before closing, assigns its rights to another party. Must the assignee also file form C-9600, even though none of the terms of the sales agreement have changed, except for the substitution of the new purchaser?

A: No, but the Division must be notified. The assignee, by taking the place of the original purchaser/transferee must now take on all of the previous party’s rights and obligations under the law, including responsibility for holding the amount of escrow in the Division’s notice to the original purchaser.

16. Q: Can the Division release confidential tax information to the purchaser if the seller waives its right in the sales contract or a release form?

A: Yes. In order for the Division to release confidential information about the seller to the purchaser, the seller must complete a Power of Attorney (M-5008-R) form authorizing the release of such tax information to the purchaser and forward the completed form to the Division’s Bulk Sale section. This form, with instructions, can be found here

17. Q: How much time does the Division have to respond to the purchaser from the date of receipt of the C-9600 form notifying the Division of the transfer?

A: The statute states that “Within 10 days of receiving such notice, the director shall notify the purchaser, transferee or assignee that a possible claim for State taxes exists and include the State’s claim.”

18. Q: When does the 10 day response time start?

A: The 10 day response time starts when the Division receives proper notification (see question #3).

19. Q: Is there any way expedite service?

A. No.  There is no expedited service in any case.

20. Q: How will the state respond to the C-9600?

A. The state will issue one or more of the following notices:

  • Escrow Letter to the purchaser with a copy to the seller - (states the amount of money to be held at the transfer).
  • Returns Required Letter to the seller - (outlines which returns must be filed and paid to obtain clearance for the bulk sales case).
  • Clearance Letter to the purchaser and if an escrow was held a copy to the seller - (states the bulk sales case has been closed, no money is to remain in escrow and absolves the purchaser of any liability).
  • Insufficient Notice to the purchaser - (lists items that are missing from the notification and must be sent in to make it complete).
  • Unreported Bulk Sales Letter - (notifies the purchaser of the assets of the assumption of the seller’s liability).


21. Q: Can an estate sale be considered a bulk sale?

A: Yes, if the assets of the estate being conveyed are business assets.

22. Q: Are the sales of business intangibles considered a bulk sale?

A: Yes.  Transfer of assets such as, but not limited to, delivery routes, goodwill, non-compete agreements, patient lists, recipes, trademarks, patents and the like are considered a transfer of business assets and the Division must be notified in accordance with the statute.

23. Q: Are transfers of disregarded entities subject to the bulk sale law?

A: Yes. For tax purposes, a disregarded entity is one that is separately taxed as part of a different entity. Disregarded entities that were previously formed with the New Jersey Secretary of State must register with the Division of Revenue in the Department of Treasury. Delays in the transfer can occur if an entity has been formed but is not registered. The Division of Taxation cannot give an escrow response to a purchaser for an entity that does not exist with the Division. Accordingly, a C-9600 will be considered incomplete if the Division is unable to identify the entity in its records.


24. Q: What is an escrow?

A: For the purpose of a bulk sale, an escrow is a specific amount of money the state demands the purchaser withhold from the proceeds at the time of closing.

25. Q: How is the escrow calculated?

A: The escrow is calculated using several factors, including but not limited to; internal and external information, established Division tax liabilities, the gain from the sale of the assets, and any unfiled returns including final returns.

26. Q: Who is responsible for holding the escrow?

A: The purchaser or the purchaser’s escrow agent must hold in escrow the demanded amount. If the purchaser or his agent does not hold the escrow as instructed by the Division, the purchaser will be liable for the seller’s tax obligations.

27. Q: The closing or the transfer occurred without notifying the Division, but the parties decided to hold an agreed upon amount in escrow. Is the purchaser protected from liability for the seller’s tax obligations?

A. No. This sale is now considered a bulk sale violation. The agreed upon escrow is a third party agreement that the Division was not privileged to and does not satisfy the bulk sale notice requirements.

28. Q: Can the escrow exceed the purchase price? Why?

A: Yes. The New Jersey Tax Court has indicated that the escrow can exceed the purchase price. “…a purchaser may assume personal liability for the seller's delinquent taxes in excess of the price he pays for the business assets.” Bunting v. Director, Division of Taxation, 1 N.J. Tax 189, 197 (T.C. 1980).

29. Q: What if there are no proceeds from the sale or the proceeds are insufficient to meet the escrow amount required by the Division?

A: It is still the purchaser’s responsibility to hold the escrow as prescribed by the bulk sale section. It will be between the purchaser and seller to decide who will provide the additional funds at the time of closing to satisfy the escrow.

30. Q: Can the escrow be reduced?

A: Yes. The escrow may be reduced as additional information is received by the caseworker that modifies the seller’s tax liability. Examples of justification to alter the escrow amount:

  • Asset Transfer Tax Declaration Form from the seller
  • Payment of deficiencies and/or audit assessments
  • Filing and payment of delinquent returns

31. Q: When will the escrow be released to the seller?

A: Once the Division is assured that all Division tax obligations of the seller have been met, it will issue a letter to the purchaser or his agent allowing the purchaser to release the balance of the escrow funds to the seller.

32. Q: Can an escrow letter or clearance letter be faxed?

A: The Division sends all correspondence via first class mail.

33. Q: What if the Division fails to timely notify the purchaser of its claim and escrow amount requirement?

A: If the Division does not respond to the purchaser within ten (10) business days with an escrow notice, the purchaser will not be liable for any state tax liability of the seller.


34. Q: What is the TTD (Asset Transfer Tax Declaration) form?

A: The TTD is the form that sellers in bulk sale transactions submit to the Division with information on the gain on the sale of business assets. It assists the Division and the seller in calculating a more accurate amount of tax due.

35. Q: Is the TTD form required for the purchaser’s C-9600 notification to be complete?

A: No.

36. Q: Who completes the TTD form (if required)?

A: The seller or authorized representative should complete the TTD form.

37. Q: When should the TTD form be submitted?

A: The TTD form (if required) should be submitted to the Bulk Sale Section after the case has been assigned to a caseworker.

38. Q: Where can the seller obtain the TTD form?

A: The form with instructions can be downloaded and printed from the Taxation website:


39. Q: Is the transfer of real estate that is used for income purposes covered by the bulk sale law?

A: Yes. However, the sale of a single or two family home by an individual (defined as a single individual, married or civil union), trust or estate is exempt.

40. Q: Is the sale of vacant land (e.g. a parking lot or easement) a bulk sale transfer?

A: Yes. Vacant land may be a business asset.

41. Q: Is the transfer of new construction on real estate covered by the bulk sale law?

A: If the transfer of new construction is done in the ordinary course of business, it is not subject to Bulk Sale.

42. Q: Is a short sale of realty considered a bulk sale?

A: Yes, as long as the realty that is being sold, transferred or assigned is used for business/income purposes. A bank approval letter should be submitted with the C-9600 form.  A Marshall’s deed carries the same weight as a Sheriff’s deed.

43. Q: In a short sale transaction or in a situation where there is no equity or proceeds from the sale will the Division require an escrow?

A: The Division reserves the right to request an escrow.

44. Q: Is a foreclosure considered a bulk sale?

A. In a formal foreclosure process, a sheriff’s deed is used to transfer assets to a transferee free and clear without encumbrances. It not subject to Bulk Sale.

45. Q: Is a deed in lieu of foreclosure considered a bulk sale?

A. A deed in lieu of foreclosure is a conveyance from the actual title owner to the mortgagee, and thus, if the property is or has been used for income producing purposes, it is considered a bulk sale transfer requiring proper and timely notice to the Division from the mortgagee.

46. Q: In a transaction where business assets are being transferred, not in the ordinary course of business, and where the seller is a non-resident, is the amount paid with the GIT/REP-1 non-resident declaration form, taken into consideration in determining the amount of escrow?

A. Yes, as long as the Bulk Sale Section caseworker is made aware of the separate gross income tax remittance.

47. Q: Is a seller/title owner who buys for investment purposes, rehabilitates property (not for rent) and then sells it subject to the bulk sale law?

A. If it is in the seller’s ordinary course of business to buy, rehabilitate and then sell properties (i.e. an activity that the seller does on a regular, as opposed to irregular, infrequent basis), then, generally speaking, these sales would not be subject to the reporting requirements of the bulk sale law. However, if in doubt, the buyer should file the C-9600 to obtain the protection against the potential of being liable for the seller’s tax liability.


48. Q: If the seller is a tax-exempt or non-profit organization, including but not limited to a church/synagogue/temple/mosque, and is selling its real property and/or tangible property not in the ordinary course of business, does the purchaser have to file a C-9600 form with the Division?

A: Yes. Even though the seller may be exempt from some Division taxes, it may still have certain tax obligations such as employee tax withholdings or sales tax obligations.

49. Q: In a bulk sale transaction, if taxes are not ordinarily due until the following year, are the returns included in the escrow amount?

A: Yes. The escrow will be calculated to include all taxes that are due and those that would become due as a consequence of the sale.

50. Q: Where can you find other information about the administration of the bulk sale law by the Division?

A: Other information and guidelines may be found in Technical Bulletin 60-R.

51. Q: Who is an authorized agent for the buyer or seller?

A: Their attorney.  Any other representative (i.e. Realtor, CPA, Title Agency) must provide an M-5008-R signed by the buyer or seller.

52. Q: How can the Division be contacted for further information about the bulk sale law and its implementation?

A. Written inquiries should be submitted to the Division to: Bulk Sales Unit, New Jersey Division of Taxation, P.O. Box 245, Trenton, New Jersey 08695-0245. Phone inquiries may be made to (609) 292-6604 with a request to speak to an employee from the Bulk Sales Unit.

Last Updated: Wednesday, 08/20/14

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