The Indiana Notice of Transfer in Bulk is a required filing when a business owner plans to transfer more than 50% of the business’s tangible personal property to another person. The form is designed to alert the Indiana Department of Revenue before the deal closes so the state can determine whether the seller has any outstanding sales tax, use tax, food and beverage tax, or county innkeepers tax liabilities. This filing is extremely important because if it is not submitted on time, the purchaser can become liable for certain unpaid taxes, plus penalties and interest, up to the amount of the purchase price or the value of the transferred tangible personal property. The notice must be filed at least 45 days before the transfer or sale takes place. Either the seller or the purchaser may file it, but the seller’s cooperation is still necessary because the state will not process the request without the seller’s authorization to release tax information. In practical terms, this form protects the buyer by helping determine whether the seller’s tax accounts are clear before the transaction is completed.
When This Form Is Required
You should use this form when more than half of a business’s tangible personal property is being transferred. The measurement is based on fair market value, not just the number of items being sold. The form is generally not required if the transfer involves less than 50% of the business’s tangible personal property. It also focuses only on tangible personal property, so real estate and intangible assets such as goodwill are not included when determining the value to report on the form. Because timing matters, the notice must be submitted early enough to meet the 45-day requirement. If the filing is incomplete or missing supporting documents, it is not treated as properly submitted and must be resubmitted.
How to Complete Indiana Notice Of Transfer In Bulk
Section 1: Seller Or Transferor Information
Section 1 asks for the details of the seller or transferor. Enter the seller’s full legal name on the Name line. On the FEIN or TID Number line, enter the seller’s federal identification number or Indiana tax identification number. If the seller is an individual, enter the Social Security Number where requested.
Then enter the seller’s mailing address, including city, state, and ZIP Code. Provide the seller’s daytime telephone number so the state can reach the contact person during normal business hours. On the seller’s point of contact line, enter the name of the individual the state should contact with questions about the form. If that person is not an owner, director, officer, or authorized employee, a properly executed power of attorney form must be included. Enter the seller’s email address as well. If the seller currently operates under a name different from the legal name, enter that on the Current DBA name line. If the seller previously operated under another business name, enter that on the Previous DBA name line.
Section 2: Purchaser Or Transferee Successor Information
Section 2 mirrors the seller section, but it applies to the purchaser or transferee. Enter the purchaser’s full legal name. Then provide the purchaser’s FEIN or Indiana TID number. If the purchaser is an individual, enter the Social Security Number.
Next, enter the purchaser’s mailing address, city, state, and ZIP Code. Provide the purchaser’s daytime telephone number and the name of the purchaser’s point of contact. If the purchaser’s contact is not an owner, director, officer, or authorized employee, a properly completed power of attorney form should be attached. Then enter the purchaser’s email address. If the purchaser currently uses a DBA name, list it on the Current DBA line. If there is a former DBA name, list it on the Previous DBA line.
Section 3: Terms And Conditions Of Sale Or Transfer In Bulk
Section 3 explains the transaction itself. On the Date of Sale line, enter the date the transfer will be completed. This is usually the date title or possession of the tangible personal property passes to the purchaser. On the Selling Price or Value of Tangible Personal Property line, enter the sale price if this is a sale, or the fair market value if it is another kind of transfer. Do not include real property or intangible property such as goodwill in this amount.
On the Percentage of Tangible Personal Property Being Transferred line, enter the percentage of the seller’s tangible personal property being transferred, measured by fair market value. If the percentage is less than 50%, the notice generally is not required. On the Description of Tangible Personal Property line, describe the property being transferred. Be specific enough to identify the nature of the assets. On the Location of Tangible Personal Property line, enter where the property is located.
There is also a line for the date on which the seller’s business or account will be discontinued. If the seller will stop using the transferred property in the business, enter that date. If the business will continue operating, enter N/A. If funds are being held in escrow to pay possible debts, enter the name and address of the bank handling the escrow in the Escrow Information area. Then check the box that best describes the transaction, such as cash sale, contract sale, conventional financing, contribution or distribution, gift, inheritance, contract or other documentation of transfer, or other. If you select Other, describe the transaction on the line provided.
Section 4: Seller’s Business Account With Indiana
Section 4 asks for information about the seller’s tax accounts with the Indiana Department of Revenue. Enter the type of account, the period covered, and the account ID for all locations. If the account is closed, enter the applicable beginning and ending dates in the Period column. If the account is still open and active, the period line may be left blank. This section helps the state identify all tax accounts that may need to be reviewed before issuing a clearance or summary.
Section 5: Signature Of Purchaser
Section 5 must be completed by the purchaser or the purchaser’s representative. The signer should sign on the signature line, enter the date, print their name, and enter their title. If the person signing is not an owner, director, officer, or authorized employee of the purchaser, a valid power of attorney form should be attached. This signature confirms the purchaser’s involvement in the filing and the information provided from the purchaser’s side.
Section 6: Signature Of Seller
Section 6 must be completed by the seller or the seller’s representative. The seller signs the form, dates it, prints their name, and enters their title. This section is especially important because it authorizes the Department of Revenue to disclose business tax information associated with the transfer to the purchaser. Without the seller’s authorization, the state will not process the notice. Even if the purchaser is the one filing the form, the seller still needs to sign so the tax information can be released.
Supporting Documents You May Need To Attach
The notice must include all required documentation based on the type of transaction. If it is a purchase, attach the signed purchase agreement. If the transfer involves a distribution from a corporation or a contribution to a corporation, attach corporate minutes or similar documentation showing the transaction details. If it is a gift, attach the filed federal gift tax return. If it is an inheritance, attach the filed federal estate and generation-skipping transfer tax return. If the transaction falls into another category, attach a third-party valuation document or other relevant records that support the stated value of the tangible personal property being transferred. Missing documentation can cause the filing to be treated as incomplete.
How To Submit The Notice
The notice can be submitted electronically through Indiana’s online tax portal or mailed to the Indiana Department of Revenue. If filing online, the business must have or create an account and follow the portal’s steps to submit the notice. If the purchaser submits the notice online, the seller still must log in and approve the release of tax information. If submitting by mail, send the completed notice and all required documents to the Indiana Department of Revenue, PO Box 7206, Indianapolis, IN 46207-7206. Whether filing online or by mail, the seller’s acknowledgment is required before the state will process the request.
What Happens After Filing
If the seller has no outstanding tax liabilities or overdue returns, the state will generally mail a tax clearance letter to both parties within 20 days after receiving the notice. That clearance letter is valid for 60 days. If the seller does have outstanding liabilities or missing returns, the state will instead send a tax summary to both parties within 20 days. The parties should be careful not to close the sale before receiving the state’s response. If the transaction is completed before a clearance letter is issued, the purchaser may still become liable as a successor for taxes owed by the seller.
Practical Tips For Avoiding Problems
File the notice well before the 45-day deadline so there is time to correct any missing information. Make sure the percentage transferred is based on fair market value and that only tangible personal property is included in the calculation. Attach the right supporting documents the first time, because incomplete filings do not count as properly submitted. Most importantly, make sure the seller signs the form and authorizes disclosure of tax information. Without that step, the filing cannot move forward and the purchaser’s protection is delayed.