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The CBS-1 form from the Illinois Department of Revenue plays a crucial role in the sale, purchase, or transfer of business assets. This form must be completed by the seller, purchaser, or transferee when a significant portion of business assets is involved. These assets include stock of goods, furniture, fixtures, machinery, equipment, or real property. Timeliness is essential; forms submitted more than ten days after the sale date will not be processed. It is important to note that the purchaser or transferee may assume liability for any debts incurred by the seller. To ensure compliance, the completed form, along with the sales contract and financing agreement, should be mailed to the Bulk Sales Unit in Chicago. For those who prefer electronic communication, faxing is also an option. The form requires detailed information about both the seller and purchaser, including identification numbers and contact information. Additionally, it asks for specifics regarding the terms of the sale, including the selling price and payment arrangements. Understanding and completing the CBS-1 form accurately is vital, as failure to report sales can lead to personal liability for taxes owed by the seller.

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Illinois Department of Revenue

CBS-1 Notice of Sale, Purchase, or Transfer of Business Assets

General information

You (or the purchaser or the transferee) must complete Form CBS-1 if, outside your usual course of business, you sell or transfer the major part of the

•stock of goods that you are in the business of selling,

•furniture or fixtures,

•machinery and equipment, or

•real property of your business.

Forms received more than 10 days after the sale date will not be pro- cessed. The purchaser or transferee may be held liable for any debt incurred by the seller.

If you need additional information, you may call our Chicago office weekdays between 8:30 a.m. and 5:00 p.m. at 312 814-3063.

Mail your completed Form CBS-1, a copy of the sales contract, and financing agreement to:

BULK SALES UNIT

ILLINOIS DEPARTMENT OF REVENUE 100 WEST RANDOLPH LEVEL 7-400 CHICAGO IL 60601

You may fax your form and sales contract to us at 312 793-3841.

Part 1: Identify the business being sold or transferred and the identification numbers

1

____________________________________________________

3

_______________________________________

 

Business name

 

 

 

Illinois business tax number (IBT no.) or account identification number

 

2

____________________________________________________

4

___ ___-___ ___ ___ ___ ___ ___ ___ ___ ___ ___

 

Street address

 

 

 

Federal employer identification number (FEIN)

Seq. number

 

 

____________________________________________________

5

___ ___ ___-___ ___-___ ___ ___ ___

 

 

Street address (if needed)

 

 

 

Social Security number

 

 

 

____________________________________________________

6

Are you required to pay any excise taxes?

Yes

No

 

City

State

ZIP

 

Excise tax number ________________________________________

Part 2: Identify the seller or transferor

7

____________________________________________________

9

(

)

—

 

 

__________________________

 

 

 

Name

 

 

 

Daytime phone number

 

 

8

____________________________________________________

10

 

 

(

)

—

____________________________________________________

 

Home or mailing address

 

 

 

Name of seller’s or transferor’s attorney

Daytime phone number

 

____________________________________________________

11

____________________________________________________

 

City

State

ZIP

 

Address of attorney

 

 

Part 3: Identify the purchaser or transferee

12

____________________________________________________

14

____________________________________________________

 

Name

 

 

 

Purchaser’s or transferree’s IBT no. and FEIN

(

)

—

 

 

 

 

 

 

13

____________________________________________________

15

____________________________________________________

 

Home or mailing address

 

 

 

Name of purchaser’s or transferee’s attorney

 

Daytime phone number

 

____________________________________________________

16

____________________________________________________

 

City

State

ZIP

 

Address of attorney

 

 

 

Part 4: Describe the terms of sale or transfer

17Date business was or will be sold or transferred. ___/___/____

Month Day Year

18Selling price of the business or the value of the business assets transferred: $ ____________________

19Was the entire business sold or transferred? Yes

No - You must complete Line 20.

20Are the seller’s or transferee’s registration numbers with the

department to remain active? Yes

No - Write the date to be discontinued. ___/___/____

Month Day Year

21Terms of sale or transfer. Write “X” in the appropriate box, and provide additional information as requested.

 

Cash sale

 

 

Contract sale. Complete the following information:

•

Down payment amount:

$ ____________________

•

Monthly payment amount:

$ ____________________

•

Date last payment is due

___/___/____

Month Day Year

Conventional financing

Other (Specify.): ____________________________________

_________________________________________________

_________________________________________________

Part 5: Sign below. This must be completed by the person submitting this Form.

22

(

)

—

24 ____________________________________________________

Print or type your name

Daytime phone number

Signature

Date

23____________________________________________________

Mailing address of person

CBS-1 (R-4-09)

This form is authorized as outlined by the Illinois Income Tax Act [35 ILCS 5/902] and the Retailers’ Occupation Tax Act [35 ILCS 120/5j]. You are required to report all sales of businesses to the Illinois Department of Revenue. Disclosure of this information is REQUIRED. Failure to provide such information may result in the purchaser or transferee

becoming personally liable for the amount of tax owed by the seller. This form has been approved by the Forms Management Center.

IL-492-4224
➤ PDF File

Form Specifications

Fact Name Description
Purpose Form CBS-1 is used to report the sale, purchase, or transfer of business assets in Illinois.
Governing Laws This form is governed by the Illinois Income Tax Act (35 ILCS 5/902) and the Retailers’ Occupation Tax Act (35 ILCS 120/5j).
Submission Deadline Forms must be submitted within 10 days after the sale date to be processed.
Liability The purchaser or transferee may be held liable for any debts incurred by the seller.
Contact Information For questions, contact the Chicago office at 312-814-3063 during business hours.
Mailing Address Completed forms should be mailed to the Bulk Sales Unit, Illinois Department of Revenue, Chicago, IL.
Fax Submission Forms and sales contracts can be faxed to 312-793-3841.
Identification Numbers Businesses must provide their Illinois business tax number (IBT) and federal employer identification number (FEIN).
Excise Taxes Form CBS-1 includes a question regarding the obligation to pay any excise taxes.
Signature Requirement The form must be signed by the person submitting it, along with their contact information.

Cbs 1 Illinois: Usage Guidelines

Filling out the CBS-1 form is a straightforward process. This form is essential when selling or transferring significant business assets. It's crucial to complete it accurately and submit it on time to avoid any potential liabilities.

  1. Gather necessary information about your business, including the business name, Illinois business tax number (IBT no.), federal employer identification number (FEIN), and the street address.
  2. Complete Part 1 by entering the business name and identification numbers in the designated fields.
  3. In Part 2, provide details about the seller or transferor, including their name, daytime phone number, home or mailing address, and the name and contact information of their attorney.
  4. Fill out Part 3 with the purchaser or transferee's information. Include their name, IBT no., FEIN, home or mailing address, and attorney's contact details.
  5. In Part 4, indicate the date of the sale or transfer, the selling price or value of the business assets, and whether the entire business was sold. Answer additional questions regarding registration numbers and terms of sale.
  6. In Part 5, sign the form. Include your printed name, daytime phone number, and mailing address.
  7. Review the completed form for accuracy. Ensure all required fields are filled out correctly.
  8. Mail the completed form, along with a copy of the sales contract and financing agreement, to the specified address. Alternatively, you can fax the documents.

Your Questions, Answered

What is the purpose of the CBS-1 form?

The CBS-1 form is used to report the sale, purchase, or transfer of business assets in Illinois. If you are selling or transferring a significant portion of your business's stock, furniture, machinery, or real property, this form must be completed. It ensures that the Illinois Department of Revenue is informed about the transaction and helps protect both the seller and purchaser from potential tax liabilities.

Who is responsible for submitting the CBS-1 form?

What information is required on the CBS-1 form?

What happens if the CBS-1 form is not submitted?

Common mistakes

  1. Missing Information: One common mistake is leaving out important details. Ensure that all required fields are filled in completely. Missing business names, identification numbers, or addresses can delay processing.

  2. Incorrect Identification Numbers: Entering wrong identification numbers, such as the Illinois business tax number or federal employer identification number, can lead to complications. Double-check these numbers for accuracy.

  3. Late Submission: Forms submitted more than 10 days after the sale date will not be processed. Be mindful of deadlines to avoid unnecessary issues.

  4. Improper Signatures: The form must be signed by the person submitting it. Failing to provide a signature or using an incorrect name can invalidate the form.

  5. Inaccurate Sale Terms: Clearly outline the terms of the sale or transfer. Misrepresenting the selling price or payment details can cause problems later on.

  6. Neglecting to Include Supporting Documents: Always include a copy of the sales contract and financing agreement. Omitting these documents can delay processing and may result in the form being returned.

Documents used along the form

When dealing with the sale or transfer of business assets in Illinois, several other forms and documents may accompany the CBS-1 form. Each of these documents serves a specific purpose and helps ensure that the transaction is properly recorded and compliant with state regulations. Here’s a brief overview of six commonly used forms and documents in conjunction with the CBS-1.

  • Sales Contract: This document outlines the terms and conditions of the sale, including the purchase price, payment terms, and any contingencies. It serves as the legal agreement between the seller and buyer.
  • Financing Agreement: If the buyer is financing the purchase, this document details the loan terms, including interest rates, repayment schedules, and any collateral involved in the transaction.
  • IRS Form 8594: This form is used to report the sale of a business as a going concern. It provides the IRS with information about the assets sold and the allocation of the purchase price among those assets.
  • Certificate of Good Standing: Obtained from the state, this document verifies that the business is compliant with state regulations and is authorized to conduct business. It reassures the buyer that there are no outstanding legal issues.
  • Bill of Sale: This document formally transfers ownership of the business assets from the seller to the buyer. It includes details about the assets being sold and serves as proof of the transaction.
  • Transfer Tax Declaration: Required in some jurisdictions, this document reports the transfer of real property and any associated taxes due at the time of sale. It ensures that all tax obligations are met during the transaction.

Understanding these forms and documents can simplify the process of selling or transferring business assets. Each plays a crucial role in ensuring compliance and protecting the interests of both parties involved in the transaction. Be sure to gather all necessary paperwork to facilitate a smooth and legally sound process.

Similar forms

The CBS-1 form from the Illinois Department of Revenue is essential for documenting the sale, purchase, or transfer of business assets. Several other documents serve similar purposes in various contexts. Here are six documents that share similarities with the CBS-1 form:

  • UCC-1 Financing Statement: This form is used to establish a secured interest in personal property. Like the CBS-1, it helps protect the rights of the creditor in case of default, ensuring that the seller's debts are accounted for during the transfer of assets.
  • Bill of Sale: A bill of sale records the transfer of ownership of goods or assets. Similar to the CBS-1, it provides proof of the transaction and details about the items sold, ensuring both parties have a clear understanding of the sale.
  • Asset Purchase Agreement: This document outlines the terms and conditions of purchasing a business's assets. Like the CBS-1, it details the assets being sold and the responsibilities of both the buyer and seller, including any liabilities that may arise.
  • Sales Tax Exemption Certificate: This form is used when a buyer claims an exemption from sales tax on a purchase. Similar to the CBS-1, it ensures that the appropriate tax obligations are addressed during the transfer of business assets.
  • Transfer of Ownership Form: This form is often required when transferring ownership of a business entity. Like the CBS-1, it documents the change in ownership and may include information about liabilities and tax responsibilities.
  • Partnership Dissolution Agreement: When a partnership ends, this document outlines the distribution of assets and liabilities. It is similar to the CBS-1 in that it ensures all parties are aware of their rights and obligations during the transfer of business assets.

Each of these documents plays a crucial role in facilitating business transactions and ensuring compliance with legal requirements.

Dos and Don'ts

When filling out the CBS-1 Illinois form, there are important dos and don'ts to keep in mind. Here’s a helpful list to guide you:

  • Do complete the form accurately and thoroughly.
  • Do submit the form within 10 days of the sale date.
  • Do include a copy of the sales contract with your submission.
  • Do provide correct identification numbers for both the seller and purchaser.
  • Don't leave any required fields blank; incomplete forms may be rejected.
  • Don't forget to sign and date the form before submission.
  • Don't use outdated forms; ensure you are using the latest version.

Misconceptions

Understanding the CBS-1 form from the Illinois Department of Revenue can be challenging. Here are ten common misconceptions about this important document, along with clarifications to help you navigate the requirements effectively.

  • Only large businesses need to file the CBS-1 form. Many believe that only large corporations are required to file this form. In reality, any business selling or transferring significant assets, regardless of size, must complete it.
  • The form is optional if the sale is informal. Some think that if a sale is informal or not well-documented, the CBS-1 form is not necessary. However, any sale of major assets must be reported to avoid liability for unpaid taxes.
  • Filing the CBS-1 form is not time-sensitive. It is a common misconception that there is no deadline for filing. In fact, forms submitted more than ten days after the sale date will not be processed.
  • The seller is always responsible for the tax liability. Many assume that the seller is solely responsible for any taxes owed. However, the purchaser or transferee can also be held liable for debts incurred by the seller if the form is not filed.
  • Only the seller needs to provide information. Some believe that only the seller's information is required on the form. In truth, both the seller and purchaser must provide detailed information for the form to be complete.
  • Faxing the form is not allowed. There is a misconception that the CBS-1 form must be mailed only. In fact, it can also be faxed to the department, providing flexibility in submission.
  • Excise taxes are irrelevant for most transactions. Many individuals think excise taxes do not apply to their sales. However, it is crucial to determine if any excise taxes are due and report them accurately on the form.
  • Legal representation is not necessary. Some believe that they can complete the form without legal advice. While it is possible, consulting an attorney can help ensure compliance and avoid future complications.
  • Once filed, the information is not public. There is a misconception that the details provided on the CBS-1 form remain confidential. In reality, this information may be disclosed as part of public records.
  • The form is the same for all types of business assets. Some think that the CBS-1 form is a one-size-fits-all document. However, different types of assets may have specific reporting requirements that must be addressed.

By clearing up these misconceptions, individuals and businesses can better understand their responsibilities regarding the CBS-1 form and ensure compliance with Illinois tax laws.

Key takeaways

Key Takeaways for Filling Out and Using the CBS-1 Illinois Form

  • Complete the CBS-1 form if you are selling or transferring a significant part of your business assets, including stock, furniture, machinery, or real property.
  • Submit the form within 10 days of the sale date to ensure processing; late submissions will not be accepted.
  • Include all necessary documentation, such as the sales contract and financing agreement, when mailing or faxing the form to the Illinois Department of Revenue.
  • Understand that both the seller and purchaser may have tax liabilities; it is crucial to provide accurate information to avoid personal liability for any owed taxes.