The NJ Sales Law was signed into law A-2748 by Governor Christie on September 14, 2011. The new law exempts individuals, estates and trusts from bulk sales notification requirements that would otherwise apply to the purchasers of one- and two-family residential and certain seasonal rental properties. Corporations, partnerships and LLC’s involved in the purchase of one- and two-family residential and seasonal rental properties are still subject to bulk sales requirements.
When does the law go into effect?
The law is effective as of September 14, 2011 and is also retroactive to August 1, 2007. Accordingly, any transactions taking place between August 1, 2007 and September 14, 2011 will no longer be treated as having been subject to bulk sales requirements.
The bulk sales rules had required purchasers of one- and two-family residential and certain seasonal rental properties to notify the Division of the pending transaction and the Division of Taxation. In many cases, required sellers to place a portion of the sales proceeds in escrow to secure the payment of taxes due from the seller. The failure of a purchaser to comply with New Jersey’s bulk sales law exposed purchasers to liability for the state tax debts of the seller.