If you have purchased an existing business, you must transfer ownership by completing the application for a business tax license and the prior owner must terminate his license by submitting a final tax report within 15 days of transfer. Visit the State of Tennessee's Online Tax Registration Website for more details.
Tennessee Code 67-4-721 - Settlement upon termination or transfer of business states:
If any person liable for any tax, penalty or interest levied hereunder shall sell out the business or stock of goods or shall quit the business, the person shall make a final return and payment within fifteen (15) days after the date of selling or quitting the business.
The person's successor, successors, or assigns, if any, shall withhold sufficient of the purchase money to cover the amount of such taxes, interest and penalties due and unpaid until such former owner shall produce a receipt from Tennessee Department of Revenue showing that they have been paid, or a certificate stating that no taxes, interest or penalties are due.
If the purchaser of a business or stock of goods shall fail to withhold the purchase money as above provided, the purchaser shall be personally liable for the payment of the taxes, interest and penalties accruing and unpaid on account of the operation of the business by any former owner, owners or assigns.