FAQs - Sales and Use Tax

What is successor liability?

Under Ohio law, you can be held liable for any outstanding sales tax liability of any business you acquire. This is known as successor liability. Ohio law requires that, during the acquisition process, you establish an escrow account. The escrow account should hold a sufficient amount of the purchase price to cover any outstanding debt. You should request that the seller provide a tax release certificate from the Department of Taxation before the escrow funds are released.

A tax release will be issued by the Department of Taxation after:
  • The business has been sold and the seller has filed the final sales tax return (final return should be sent directly to the Central Office, Tax Release Group, with guaranteed funds)
  • The department has reviewed the seller's account and found that:
     (a) All sales tax returns have been filed,
     (b) all reported tax, interest and penalties have been paid,
     (c) all filing and reporting requirements have been met.