Retailers engaged in business in California must register with the California Department of Tax and Fee Administration (CDTFA) and pay the state's sales tax. An asset sale will generally be subject to California sales taxes.The taxes on the sale of your business will depend on the transaction type and structure as well as the company's assets, price allocation, and balance sheet. The amount of tax that you will ultimately have to pay depends upon whether the money you make from the sale is taxed as ordinary income or capital gains. Many Buyers will require that a sale be structured as an Asset Purchase in order to avoid responsibility for prior liabilities or expenses of the business. The sale of a business usually triggers a long-term capital gain for the seller and federal capital gains taxes will apply. Explore tax strategies for selling your business. Bessemer Trust's expert guidance covers asset vs. Buyers and sellers can be responsible for any tax liabilities that were incurred prior to the sale. This can cause additional burden to the purchaser.