🚚 Buying or Selling a Business? Don't Forget the January 1st Tax Responsibility

Business acquisitions are tricky, and the TPP tax is a frequent snag, particularly when a business is sold mid-year.

The Assessment Date Rule: Florida TPP tax liability is assessed to the owner in possession of the assets on January 1st of the tax year.

- Scenario: A business is sold on July 1st. The former owner was in possession of the assets on January 1st. The former owner is responsible for filing the DR-405 by April 1st. The resulting tax bill, mailed in November, is legally owed by the former owner, but the new owner is now the one in possession of the assets.

The Solution

Proper handling of TPP tax should be included in the closing documents. The buyer often receives a credit for the portion of the tax year they owned the assets, but clear responsibility for the filing and payment must be documented to avoid future warrants against the new business entity.