tax clearance certificate

tax clearance certificate
USA
A certificate issued by most states generally to certify that a taxpayer has filed all tax returns due and paid all taxes and certain other amounts owed as of the date of the certificate. A tax clearance certificate must be requested on a state by state basis. The procedure for and timing of an application for a tax clearance certificate as well as the specific taxes certified varies from state to state. A buyer acquiring a business or assets of a business may request that a seller provide a tax clearance certificate to avoid successor liability for the seller's taxes.

Practical Law Dictionary. Glossary of UK, US and international legal terms. . 2010.

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