Form DTF-802: Statement of Transaction

What This Form Is

This isn't your tax return. Form DTF-802 is a notification form. If you don't file it, you don't get a penalty notice in the mail — instead, you silently forfeit your legal protection. It's called “successor liability” and this form is how the New York State Department of Taxation and Finance enforces it.

The Core Concept: Successor Liability

When you buy a business's assets in New York, the state sees you as the new owner of not just the inventory and equipment — but also of any hidden tax liabilities. Form DTF-802 makes you do your homework. By filing it, you are either:

• Proving the seller paid their taxes by attaching a Certificate of Payment from the state, or
• Withholding part of the purchase price to cover the potential tax debt and sending that money directly to the state.

If you ignore this: you lose your right to withhold that money. The full purchase price goes to the seller, and you become personally on the hook if a tax bill shows up later — with no statute of limitations on that liability.

Who Must File

You are required to file Form DTF-802 if you purchase:

• A business or stock of goods (inventory) from a seller who was required to collect New York State and local sales tax.
• At least 50% of the tangible personal property (assets like equipment, furniture, fixtures) of a business in one or a series of transactions.

This applies to purchases of restaurants, retail stores, laundromats, contractors — anyone who sold taxable goods or services. It doesn't matter if the business is a corporation, LLC, or sole proprietorship. The liability follows the assets to you, the buyer.

The Two Paths at Closing

Path A: The Seller Gets a Certificate of Payment. Before closing, the seller requests this certificate from the Tax Department. The state reviews the seller's account. If they're clean, the state issues a certificate saying no taxes are due. You attach this to your Form DTF-802 and pay the seller the full purchase price at closing. You have zero liability for the seller's past taxes. This is the gold standard — it's what your lawyer should insist on.

Path B: You Withhold Money from the Seller. The seller doesn't have a certificate, so you are required by law to withhold a portion of the purchase price — enough to cover potential sales tax owed — from the seller at closing. You send the withheld money to the NYS Tax Department with your Form DTF-802 and pay the seller the remainder. This path ties up your cash at closing.

What You Need to Complete It

It's a straightforward form but requires precise information from your closing documents:

• Names, addresses, and EINs/NYS Tax IDs of both buyer and seller.
• Details of the sale: date, location, description of assets purchased.
• The total purchase price, broken down by category.
• Which path you're taking: Certificate of Payment or Withholding.

Filing Deadline & Where to File

You must file Form DTF-802 within 10 days of the date of the sale. Mail it to the NYS Tax Department office in Albany listed in the instructions. Use certified mail.

Frequently Asked Questions

I only bought the name and customer list, not any physical assets. Do I need to file?

The law applies to the purchase of tangible personal property or a stock of goods. If you only bought intangible assets (goodwill, intellectual property) and no physical items, you likely don't have to file. When in doubt, get a ruling from the Tax Department or your attorney.

The seller is reputable and their lawyer says they're paid up. Can I skip this?

Never. You have no way of knowing if they have an open audit, a dispute, or a hidden liability. Their lawyer works for them, not for you. The only proof that matters is the official Certificate of Payment from the NYS Tax Department. Accept nothing else.

What if I'm buying the corporate stock of the business, not its assets?

This form generally does not apply. Form DTF-802 is for asset purchases. When you buy the stock of a corporation, you are buying the entity itself with all its liabilities. You need to perform exhaustive due diligence instead — the form isn't your shield in a stock sale.

Who should handle this — my lawyer or my accountant?

Primarily your lawyer handling the acquisition — obtaining the NYS DTF Certificate of Payment should be a standard line item on the closing checklist. Your accountant can help fill out the form, but ensuring compliance is a legal condition of the sale that your attorney must enforce.

Important: Scope of Coverage

The form specifically covers Sales and Use Tax liability. However, as a successor, you could also be liable for other unpaid taxes (such as withholding tax) in certain situations. The DTF-802 process is your main shield for the biggest, most common liability — but it does not cover everything.

The Bottom Line

Form DTF-802 is the most important piece of paper in a New York business acquisition that nobody talks about until it's too late. Your deal should not close until you have the seller's Certificate of Payment in hand. The small amount of time and hassle to get it is nothing compared to the financial catastrophe of being on the hook for the previous owner's tax mistakes. In New York, when you buy a business, you're also buying its tax history.