1. (1) A purchaser, transferee or assignee of business assets in a bulk sale must give timely notice to the Department of Taxation and Finance concerning the bulk sale as provided for in paragraph (c) of section 1141 of the Tax Law, and section 537.2 of this Part.
2. (2) The purchaser, transferee or assignee is not relieved of his obligation to give notice of the bulk sale by reason of any representation or information from the seller or by reason of any knowledge or belief on the part of the purchaser, transferee or assignee that no taxes are owed by the seller, transferrer or assignor, or for any other reason.
3. (3) The purchaser, transferee or assignee shall file with the Department of Taxation and Finance a certificate of registration if required by section 1134 of the Tax Law and section 533.1 of this Title.

4. (b) The purchaser, transferee or assignee is required to withhold the lessor of:

   1. (1) all sums of money, notes, property or choses in action or other consideration (referred to in this Part as funds which he is required to turn over to the seller, transferrer or assignor; or
   2. (2) the total tax due from the seller, transferrer or assignor as contained in the notice of total tax due the State which is sent to the purchaser by the Department of Taxation and Finance within 90 days from the date or deemed date of receipt (whichever is applicable) of the notice of bulk sale. The purchaser is forbidden to turn over such funds to the seller, until relieved of such obligation as provided for in subdivision (c) of this section. It should be noted that since it is unlikely that the Department of Taxation and Finance will issue such a notice of total tax due prior to the sale closing, a purchaser, transferee or assignee wishing to avoid derivative liability for the seller's, transferrer's or assignor's sales and use taxes should withhold the entire consideration to be paid the seller, transferrer or assignor until such consideration is released by the department or any such liability is satisfied. A purchaser's, transferee's or assignee's failure to notify the department of a bulk sale of business assets will not relieve him of his obligation to withhold and pay over the sale proceeds or fair market value of the assets acquired. A purchaser, transferee or assignee who fails to withhold such consideration will become personally liable for any sales and use taxes owed by the seller, transferrer or assignor at the time of the sale up to the greater of the selling price or fair market value of the business assets transferred.

5. (c) The purchaser, transferee or assignee is relieved of his obligation to withhold such funds and is relieved from liability for taxes due from the seller (except the sales and use taxes due on the sale of tangible personal property between the seller and purchaser) if notice to the Department of Taxation and Finance has been given pursuant to section 537.2 of this Part; and

   1. (1) the Division of Taxation, within five business days (excluding Saturdays, Sundays and legal holidays) from the date of actual receipt, or if applicable the date of deemed receipt, whichever date is later, of a proper and timely notice given by the purchaser, transferee or assignee, fails to inform such purchaser, transferee or assignee by mailing to him within such time a notice that a possible claim for taxes exists against the seller, transferrer or assignor under the terms and conditions set forth in section 537.6 of this Part;
   2. (2) the Division of Taxation, after receipt of a proper notice both as to service or contents (whether or not such notice was timely in accordance with the provisions of subdivision [c] of section 537.2 of this Part), fails to give notice of the total amount of any taxes due from the seller under the terms and conditions set forth in section 537.6 of this Part within 90 days after receipt of the notice;
   3. (3) the purchaser, transferee or assignee has received from the Division of Taxation a notice that the funds being withheld may be released; or
   4. (4) the purchaser, transferee or assignee has received, from the seller, transferrer or assignor, a bulk sales tax certificate issued by the Division of Taxation to such seller, transferrer or assignor stating that all taxes due up to the date of sale have been paid. (See section 537.5[f] of this Part for detailed information on the pre-sale audit program.)
6. (d) Such funds required to be withheld are subject to a first priority right and lien for any taxes theretofore or thereafter determined to be due from the seller, transferrer or assignor.
7. (e) The purchaser may pay any taxes due on the purchase of any tangible personal property directly to the Department of Taxation and Finance as provided in section 531.6 or 533.3 of this Title.

(a)