- Agency
- Missouri Department of Revenue, Business Tax
- Paperwork
- A tax clearance or a sales tax certificate of no tax due, requested by the seller (the department lists Form 943)
- The clock
- Request it before closing so the buyer can see the result and decide what to hold back
Watch for: Skipping it. A buyer who learns about unpaid sales tax after closing may be liable for it, so careful buyers and their lenders insist on clearance first.
Why buyers care
Under Missouri's successor liability rule, a person who acquires a business or its assets can become responsible for the seller's unpaid sales tax. That means the buyer inherits a problem they did not create.
Careful buyers therefore ask for proof that taxes are paid. Lenders often ask for the same proof before they release funds.
What the seller requests
The Department of Revenue tells buyers to get either a tax clearance or a sales tax certificate of no tax due from the seller before they purchase. The seller can apply for a tax clearance using the department's Form 943.
Check the department's current instructions for how to submit the request, since the department has moved many business filings online over the years.
What the department checks
The department looks at your tax accounts and tells you whether anything is owed. Unfiled returns are the usual cause of delay, so file every missing return before you apply.
If tax is owed, you pay it or arrange a plan. Many sellers settle the balance from sale proceeds at closing.
Holding money back
The state's rules describe a buyer withholding enough of the purchase price to cover the tax owed until the seller shows proof of payment. A buyer's attorney may ask for an escrow for this purpose.
A statement from the seller that there are no creditors does not protect a buyer, according to the department. A written clearance does.
If the clearance is slow
Do not wait until the week of closing. Start the request as soon as you have a signed letter of intent, and ask your CPA to review the account first so nothing surprising appears.
A buyer may agree to close with a holdback while the department finishes, but the lender must accept that arrangement too.
Other tax accounts
Withholding tax from employee pay is a separate account. Ask your CPA whether the clearance request covers it, and whether the unemployment account needs its own step, as described in the unemployment tax account guide.
Clauses to ask your attorney about
- Delivery of the tax clearance as a closing condition
- Escrow or holdback if the clearance is late
- Who pays any balance the department finds
- Who answers a state notice after closing
Related steps
City taxes are a different office, covered in St. Louis earnings tax account closing. Deal structure also affects exposure, so read asset sale or stock sale. When you want a number, see what your company is worth.
This page is general information and not tax or legal advice. Confirm the process, forms and timing with your CPA, your attorney and the Missouri Department of Revenue.