Did bulk sales laws go away?
UCC Article 6 was repealed in most states. Tax successor liability and revenue-agency bulk-sale notices did not vanish with it. Confirm the current DOR practice before close.
A bulk sales law was the old Uniform Commercial Code Article 6 rule: if you sold a business’s inventory out of the ordinary course, you had to notify creditors or they could chase the goods. The Uniform Law Commission’s Article 6 materials describe that bulk-transfer statute and its repeal. Most states repealed Article 6. That repeal does not mean a grocery asset sale is free of notice. Many revenue agencies still impose sales-tax successor liability, a bulk-sale notice, or a tax-clearance practice on the same close.
Grocery Store Business Broker — HedgeStone Business Advisors’ grocery practice, led by Jason Taken — puts that notice on the closing checklist next to the count. Book a confidential intro when you want the clearance path named for your state. Bring the entity type and whether this is assets or equity.
FMI’s channel is a high-turn inventory business. Census NAICS 445110 is supermarkets and other grocery retailers that sell a general line of food. When you sell that stockroom in one night, you are exactly the transaction bulk-sale and successor-tax rules were aimed at.
Article 6 is mostly gone; tax successor risk is not
Article 6 existed because a merchant could sell the stock, pocket the check, and leave creditors looking at an empty room. States repealed it as clumsy. Sales-tax agencies kept a simpler idea: if you buy the inventory and the seller owes tax, the agency may look at the buyer. That is successor liability, not nostalgia for UCC 6.
Do not take “we repealed bulk sales” as a closing opinion. Confirm the current revenue-agency notice with counsel and the state department of revenue. Alaska, Delaware, Montana, New Hampshire, and Oregon have no statewide sales tax — and still may want a business-tax clearance on an entity or asset deal. Hawaii’s DOTAX clearance (Form A-6 practice) is a known closing item. Those are different desks. They are still desks.
This page will not invent a wait-day count for any DOR. Agencies publish their own clocks. Some issue a clearance. Some tell you how much to escrow. Some stay silent until you ask. Ask.
Grocery inventory at cost is the bulk. Fixtures and goodwill ride in the same APA, but the tax notice is usually about the inventory and the seller’s sales-tax account. Count the stock under written rules. Then file the notice that belongs to that count.
How grocery inventory sales trigger the notice
Most independent groceries sell as asset deals. The buyer wants the stock, the equipment, and the going concern without the seller’s entity. That structure is why bulk-sale and successor-tax practice still shows up. A stock sale keeps the tax account inside the entity — and still needs a clearance conversation, just a different one.
New Jersey’s bulk-sale process (Form C-9600 lineage) is a well-known asset-sale requirement. New York’s Tax Law bulk-sale notice (Publication 750 / Form AU-196.10 lineage) is a standard item. California CDTFA successor-liability practice is on a normal California grocery checklist. Illinois IDOR bulk-sales practice is the same kind of item. Confirm current forms. Do not photocopy a 2014 instruction sheet into the escrow letter.
Escrow is how you survive the gap. The buyer does not want to wire the full price while the seller’s sales-tax account is open. The seller does not want a holdback that never ends. A holdback or an escrow instruction tied to the clearance letter is the adult version. Handshake “we’ll square up with the state” is how grocery files get letters a year later.
SBA 7(a) change-of-ownership loans go to a published $5 million maximum. Lenders already think in tax liens and payoff letters. A missing bulk-sale notice is a closing delay, not a personality conflict. Put it on the same calendar as UCC searches and the landlord estoppel.
Clearance, escrow, and the holdback
Ask the agency two questions. What notice do you want on this asset sale. What does the buyer need to avoid successor sales-tax exposure. The answers are a form, a stop-escrow amount, or a clearance letter. Write those answers into the APA.
Sellers should pull account transcripts early. Unfiled periods, under-collected prepared-food tax, and a deli that was never on the return are how clearances stall. Sales-tax filings are also a sales-corroboration tool where food is taxed or partially taxed. Use them twice: as diligence on volume, and as the file the DOR will read.
Buyers should not “fix it later.” Successor liability is the point of the statute. If the seller’s tax is unpaid, the agency may treat the inventory you just bought as the collection path. That is why the holdback exists alongside shrink. Grocery already fights about what is unsellable at 2 a.m. Add a tax line so you are not fighting the state on day sixty.
Multi-store deals need one calendar per legal entity and per state. A two-state independent is two notice regimes. Do not let the Illinois store’s clearance stand in for the Indiana store.
BizBuySell’s 3.38 average earnings multiple on 2025 grocery and supermarket sold businesses prices a going concern. It does not price a successor-tax surprise. Recast SDE first. Then keep enough cash in escrow that a DOR letter cannot unwind the close.
States that still run a bulk-sale desk
Practice is not uniform. Some states want a notice before close. Some want a request for a stop-escrow letter. Some will not talk until you send the APA. The state-by-state bulk sales guide is the map. This answer is the concept: repealed UCC 6, live tax successor risk, grocery inventory as the bulk.
Do not mix this desk with SNAP or alcohol. USDA FNS still requires a new SNAP application for new owners. Alcohol agencies still must approve the incoming licensee. NABCA’s seventeen control states change the spirits story. None of that is a bulk-sale notice. Put all of them on one closing sheet so the escrow officer is not discovering desks in week six.
Book a confidential intro when you want Jason Taken to put tax clearance on the same page as the recast and the count. Bring the entity chart and the state where the stockroom sits. The parent guide is state-by-state bulk sales and tax clearance. The seller hub and how a sale works put the notice back in the close sequence. Read tax clearance certificate for the document you actually want in the file.
An illustrative recast on What is a bulk sales law?
These figures are a teaching walk-through for What is a bulk sales law?, not a quote and not a sold comp. Order of operations: weekly sales, recast SDE, inventory at cost, then a multiple band.
| Input or output | Illustrative figure |
|---|---|
| Weekly sales (illustrative) | $228,000 |
| Annual sales | $11,856,000 |
| Recast SDE | $367,536 (3.1% of sales) |
| Inventory at cost | $846,857 (~14 turns) |
| Occupancy check | $343,824 / year (2.9% of sales) |
| Low going-concern | $1,637,059 at 2.15x SDE + inventory |
| High going-concern | $2,004,595 at 3.15x SDE + inventory |
| Sketch DSCR on a note | 1.49 |
If weekly sales or shrink move 8 percent, the SDE and the note move with them. That is why Jason Taken starts with scan data and the lease, not with a neighbor's rumor multiple.
Book the intro call with your side of the table ready: seller files or buyer capital. The calendar is the only next step.