For nearly five years now, New Jersey transactional attorneys have been working under a broad application of the New Jersey bulk sales tax law, N.J.S.A. 54:50-38 (Bulk Sales Act). In most cases, compliance is simple. But there are some unusual transactions — including short sales and deeds in lieu of foreclosure, sign-and-close deals, contributions of property to joint ventures and auction sales — where complying with the Bulk Sales Act is not so straightforward.
Originally, the bulk sales tax law dealt only with persons required to collect and remit sales tax. N.J.S.A. 54:32B-22(c). In 2007, the Bulk Sales Act was adopted, which expanded the original bulk sales tax law to apply to transactions in which any seller makes a bulk sale. Failure to comply results in the buyer’s becoming liable for all state tax obligations of the seller, not just sales tax.
