Section 54:32B-22(c) of The New Jersey Sales and Use Tax Act, N.J.S.A. 54:32B-1 et seq. states that when­ever a person required to collect and remit sales tax makes a sale, transfer or assign­ment in bulk of the whole or any part of its business assets, other than in the ordinary course of business, the purchaser has to notify the Division of Taxation at least 10 days in advance. A purchaser who fails to provide the required notice, or having pro­vided the notice fails to remit to the state or escrow the amount of sales tax claimed by the state, becomes liable for the amount of past sales tax obligations of the seller.

Apparently the State of New Jersey is now deeming rental properties part of the bulk sales tax provision.  Most attorneys and real estate professionals suggest their clients not close on a sale until they have a determination letter or clearance letter from the state.  When Agreements of Sale are signed, the real estate professionals are often asking both the buyers and sellers to complete their respective forms and sending them in as a "package."  The state is taking at least ten days to issue the clearance letter.  If you close without either one and it is determined that the sellers did owe the tax and did not or will not pay it, it does become a lien on the property.

If the seller is a non-resident and is paying the 2% estimated gross income tax, the state will issue the clearance letter.