What you file, in order
- File every sales tax and withholding return due up to the closing date, and pay any balance with penalty and interest.
- Request a Tax Clearance Certificate from the Georgia Department of Revenue on Form TSD-10, with the buyer's details and sale terms.
- Attach a copy of the purchase agreement and any financing agreement, as the form asks when you sell assets or quit.
- Give the certificate to the buyer so any money held back for state taxes is released.
- Close your sales tax and withholding accounts through the Georgia Tax Center and file final returns.
Dates to know: The form's instructions say to allow at least ten business days, and it won't be processed while any return is missing or any balance is unpaid.
Why Your Buyer Cares About Your Taxes
Georgia law puts the buyer of a business, or of its stock of goods, in a tough spot.
If the seller owes sales tax, the buyer is expected to hold back enough of the purchase money to cover it until the seller shows a receipt, or a certificate from the state, that it has been paid.
A buyer who skips that holdback can become personally liable for the seller's unpaid tax, up to the amount of the purchase price.
The Department of Revenue says plainly that a buyer can be held responsible for a seller's outstanding sales or withholding tax, and that nothing in the contract between seller and buyer can remove that.
Georgia's Supreme Court has held a buyer of substantially all of a business's assets liable for the seller's unpaid sales tax, even though the seller had said the taxes were paid. Buyers' attorneys know that case. Expect them to ask for clearance.
What the Holdback Means for You
In practice, the purchase agreement will usually say that part of your price sits in escrow, or isn't paid, until you deliver a Tax Clearance Certificate. The amount depends on what your attorney and the buyer's attorney agree on.
That money is yours. But it only comes to you once the state confirms your accounts are clean. Every week your clearance is late is a week your money sits with someone else.
What Form TSD-10 Is
TSD-10 is the Georgia Department of Revenue's Request for Tax Clearance Certificate. When you fill it out because you are selling business assets, stock of goods or equipment, or have quit the business, the form asks for:
- Your business name and tax account information
- The buyer's name and address
- The date of the sale
- The selling price and the terms
- A copy of the sales contract and any financing agreement
The certificate covers the state taxes the Department tracks for your business, including sales and use tax and withholding.
Who Can Request It
Only the taxpayer, meaning your company, or someone you authorize with a signed disclosure form can get the certificate.
A buyer can't request one on its own about you. In most deals your CPA or attorney files the request on your behalf once the closing date is close.
Why a Request Gets Held Up
The Department won't issue a clearance if any return is unfiled or any balance is owed, including penalty and interest. Small gaps cause most delays:
- A month of sales tax that was filed late or not at all
- A withholding return for a quarter when payroll was light
- Penalty and interest left over from an old notice
- A location account you forgot was still open
Pull your account history in the Georgia Tax Center a few months before you plan to close. Clean up anything open while there is still time.
Closing Your Accounts
Tax clearance confirms you are paid up. Closing your accounts tells the state you have stopped.
You can ask the Department of Revenue to close an account by phone, through the Georgia Tax Center or in writing, but only once all required returns are on file. Closing an account doesn't erase anything you still owe.
You will also file final federal and Georgia income tax returns for the company for the year of the sale. Corporations, partnerships and LLCs mark the return as final. Your CPA handles these.
Asset sale or stock sale
In an asset sale, the usual case for companies under a few million dollars, your company stops operating and closes its accounts. The buyer opens its own.
In a stock sale, the company keeps its accounts under new owners, and the buyer's concern becomes everything the company already owes.
Other Clearances Come Next
State sales and withholding taxes are only one piece. Your unemployment account is with a different agency, the Georgia Department of Labor; see the unemployment rate transfer guide.
Your county personal property return and city business license have their own steps.
See the Fulton County return guide and the City of Atlanta Final/Close form guide.
A Short Timeline
- Three to four months before closing: review every Georgia Tax Center account and fix gaps.
- As the closing date firms up: file TSD-10 with the sale details.
- At closing: agree how much is held back until the certificate arrives.
- After closing: file final returns, close the accounts and deliver the certificate.
This page is general information, not tax or legal advice. Confirm the details for your company with your CPA or attorney. Sources we used include the Georgia Department of Revenue's guidance on successor liability and the TSD-10 form instructions.
Want to know what your company could sell for before any of this starts? Read business valuation before you sell, then send the form or call (404) 555-0139.