Schnyder

In this appeal, we interpret Revenue and Taxation Code sections 6811 (section 6811) and 6812 (section 6812) in the context of a bulk sale. A bulk sale is a sale of most or all of a business’s inventory and equipment. Sections 6811 and 6812 apply when a business that owes sales or use taxes is being sold. Section 6811 requires the buyer of the business or the business assets to withhold the amount of the taxes from the purchase price until the seller produces a receipt from the State Board of Equalization showing that the tax has been paid or a certifícate stating that no amount is due. Section 6812 specifies that if the buyer fails to do this, the buyer becomes personally liable for the taxes to the extent of the purchase price. These statutes are known as successor liability statutes.

Using the bulk sales law (a procedure affording the creditors of a business that is being sold an opportunity to satisfy their claims before the business can transfer its assets), the buyers of the business here, John and Walter Schnyder (the Schnyders), through their escrow agent, filed an interpleader action with the purchase funds; the idea was to allow the business’s multiple…