Wednesday, July 29, 2015

Closing your Business Escrow and your State Board of Equalization Release

3/19/15 - Often closing the escrow on the sale of a Business, with or without a liquor license, can be a lot of work for the Seller due to requirements to close out accounts with governmental agencies. For instance, State Board of Equalization, has a process which is quite involved and requires a minor audit at a minimum and on occasion, a full audit once the Seller has had his last day of business.

As an escrow holder we work to accommodate the parties and to assist them in moving the process along by submitting, upon opening the escrow, a written Request for Certificate of Payment to the State Board of Equalization, with the intention of beginning the 60 day period as State law allows (though in the event the State Board of Equalization selects the business for Audit, the 60 day period will be adjusted and no longer from date of receipt of the Request for Certificate of Payment).

Once the Seller has had his last day of business, the State Board of Equalization will require the following (at a minimum);
1) Return of the Sellers Permit as issued by State Board of Equalization;
2) Closing Tax Return;
3) Copies of Sales Tax returns for the last two quarters;
4) Proof of Payment for the last two quarters;
5) Copy of Fully Executed Escrow Instructions;
6) Fully Executed Itemized List of Furnishings, Fixtures and Equipment;
7) Cashiers Check for the payment of all Sales Taxes due, per the Closing Tax Return;

Just know that the more you are prepared the less aggravation and frustration you will experience in obtaining the Releases required to close escrow and to achieve the ultimate goal, the receipt of your money from escrow.

TIP: A personal appearance to State Board of Equalization is preferable to submit all documents and funds to expedite the processing and issuance of the Certificate of Payment. Best to bring a cashiers check for payment and avoid electronic payments at this time to avoid delays and additional time State Board may require to verify payment has been received and applied to the account.

ADDITIONAL TIP: Bring and leave in the car a box filled with several years of books, records, bank statements, Sales Tax Returns, State and Federal Income Tax Returns etc. when you make your personal appearance to the office of State Board of Equalization. More often than not they will request documents you may not have expected, taking these documents with you in the car will avoid a trip back home and back to their office, which will be a timesaver.

Find out more about us at Any Questions? Contact our Escrow Expert! Sepulveda Escrow Corporation (818) 838-1831. Follow our company on FacebookTwitterLinkedIn, and Google+.

1 comment:

  1. Thank you so much for these tips. I appreciate all your help in this process.