- Agency
- Kansas Department of Revenue, business tax accounts
- Paperwork
- Final sales tax and withholding returns, a closing notice for each account and a records file
- The clock
- Do this soon after closing, and keep filing every period until the accounts are closed
Watch for: Walking away with open accounts. Unfiled returns, even for zero activity, can bring notices and penalties later.
Why accounts stay open
An asset sale ends the business you ran, but your sales tax and withholding registrations do not close themselves. The state still expects returns for every period the account is open.
Buyers register under their own names, so they do not take over your account numbers.
Sales tax account
Collect and report sales tax through the closing date. File a final return that covers the last period, then tell the Department of Revenue that the business has sold or closed.
The department's business tax materials explain how to report a change in ownership or closing. Ask your CPA to handle the notice so the dates match the sale agreement.
Withholding account
If you had employees, you withheld state income tax from their pay. File the final withholding returns and deposit every dollar collected through your last payroll.
Provide final wage statements to employees on time, since they need them for their own filings.
Bulk sale awareness
The state's sales tax publication explains that a buyer of the total assets of a business takes on its liabilities. Buyers often ask for a tax clearance for that reason.
Our tax clearance letter guide covers how to request it. Do not close your accounts before the buyer has what it needs.
Order of operations
Keep the accounts open until the last sales are reported and the last payroll is deposited. Then file the final returns and send the closing notice.
If the buyer needs a tax clearance, finish that first, because closing an account too early can complicate the request.
Give the buyer copies of any open notices, so a letter that arrives after closing goes to the right place.
Records to keep
- Final returns and payment confirmations
- The notice you sent the state and any reply
- The sale agreement and closing statement
- Payroll and sales records for the years you owned the business
Keep records for the period your CPA recommends. Audits can reach back, and buyers sometimes ask for help with questions long after closing.
Other accounts to remember
Unemployment tax, county property filings and local licenses are separate. See the unemployment account transfer and the county rendition guides.
If you sell retail inventory, consult the farm and ranch supply store page for how buyers count stock. To start the process, find your price range.
This page is general information and not tax or legal advice. Confirm every step with your CPA, your attorney and the Kansas Department of Revenue.