Closing a business
Which states require a tax clearance to dissolve a business?
Of the 45 states we have checked, 6 require a tax clearance before you dissolve, 10 require it for some businesses and 27 do not. For 5 states we found no official statement either way, so ask that state's tax agency.
What a tax clearance is
A tax clearance is the state tax agency's word that your returns are filed and your tax is paid. Some states want it in hand before they will accept the dissolution. Others ask only for a final return.
The names differ. Texas issues a certificate of account status, New York a consent to dissolution and Pennsylvania a tax clearance certificate.
A no still leaves work. California's Franchise Tax Board issues no clearance certificate, but it wants every return filed, the final one marked final, and the dissolution papers within 12 months of it.
Tax clearance to dissolve, state by state
Each state links to its own page. Where we found no official statement, the table says so and names the agency to ask. It never fills the gap with a no.
| State | Tax clearance to dissolve | What to ask for | Official source |
|---|---|---|---|
| Alabama | No | Alabama Department of Revenue | Alabama Department of Revenue |
| Alaska | No | Alaska Department of Revenue, Tax Division | Alaska Department of Revenue |
| Arizona | Varies | Form 10523, Tax Clearance Application for a Certificate of Compliance for Dissolution or Withdrawal. Arizona Department of Revenue | Arizona Corporation Commission |
| Arkansas | No | Arkansas Department of Finance and Administration | Arkansas Department of Finance and Administration |
| California | No | California Franchise Tax Board | California Franchise Tax Board |
| Colorado | No | Colorado Department of Revenue | leg.colorado.gov |
| Connecticut | Varies | Form AU-797, Request for Dissolution Statement Letter. Connecticut Department of Revenue Services | portal.ct.gov |
| DelawarePage being checked | Tax paid first (no separate certificate), needs a second look | No separate clearance certificate. Delaware Division of Corporations, Franchise Tax Section | corp.delaware.gov |
| District of Columbia | No | DC Office of Tax and Revenue | code.dccouncil.gov |
| Florida | No | Florida Department of Revenue | leg.state.fl.us |
| GeorgiaPage being checked | No, needs a second look | Georgia Department of Revenue | rules.sos.ga.gov |
| Hawaii | No | Hawaii Department of Taxation | capitol.hawaii.gov |
| Idaho | No | Idaho State Tax Commission | legislature.idaho.gov |
| IllinoisPage being checked | No official statement found | Ask the Illinois Department of Revenue | Illinois Department of Revenue |
| Indiana | No | Indiana Department of Revenue | iga.in.gov |
| Iowa | No official statement found | Ask the Iowa Department of Revenue | Iowa Department of Revenue |
| Kansas | No | Kansas Department of Revenue | Kansas Department of Revenue |
| Kentucky | No | Kentucky Department of Revenue | onestop.ky.gov |
| Louisiana | Varies | No tax form to file. Louisiana Department of Revenue (notified by the Secretary of State) | revenue.louisiana.gov |
| Maine | No | Maine Revenue Services | legislature.maine.gov |
| Maryland | No | Comptroller of Maryland | marylandcomptroller.gov |
| Massachusetts | No | Massachusetts Department of Revenue | mass.gov |
| Michigan | Yes | Request for Tax Clearance Certificate. Michigan Department of Treasury, Tax Clearance Section | michigan.gov |
| Minnesota | No | Minnesota Department of Revenue | revisor.mn.gov |
| Mississippi | No official statement found | Ask the Mississippi Department of Revenue | Mississippi Department of Revenue |
| Missouri | Varies | Request for Tax Clearance. Missouri Department of Revenue, Tax Clearance Unit | Missouri Department of Revenue |
| Montana | Varies | Tax Certificate. Montana Department of Revenue | Montana Department of Revenue |
| Nebraska | No | Nebraska Department of Revenue | nebraskalegislature.gov |
| Nevada | No | Nevada Department of Taxation | leg.state.nv.us |
| New Hampshire | Yes | Form AU-22, Certification Request for a Certificate of Dissolution. New Hampshire Department of Revenue Administration | New Hampshire Department of Revenue Administration |
| New Jersey | Varies | Form A-5088-TC, Application for Tax Clearance Certificate. New Jersey Division of Taxation | nj.gov |
| New MexicoPage being checked | Varies, needs a second look | Form ACD-31096, Tax Clearance Request. New Mexico Taxation and Revenue Department | New Mexico Taxation and Revenue Department |
| New York | Varies | Form TR-960, Consent to Dissolution of a Corporation. New York State Department of Taxation and Finance | New York State Department of Taxation and Finance |
| North Carolina | No | North Carolina Department of Revenue | ncleg.gov |
| North DakotaPage being checked | No official statement found | Ask the North Dakota Office of State Tax Commissioner | North Dakota Office of State Tax Commissioner |
| Ohio | Varies | Form D5, Notification of Dissolution or Surrender. Ohio Department of Taxation, Tax Release Unit | Ohio Department of Taxation |
| Oklahoma | No | Oklahoma Tax Commission | oklegislature.gov |
| Oregon | No | Oregon Department of Revenue | oregonlegislature.gov |
| Pennsylvania | Yes | Form REV-181, Application for Tax Clearance Certificate. Pennsylvania Department of Revenue and Department of Labor and Industry | pa.gov |
| Rhode Island | Yes | Tax status confirmation. Rhode Island Division of Taxation | docs.sos.ri.gov |
| South Carolina | No | South Carolina Department of Revenue | South Carolina Department of Revenue |
| South Dakota | No | South Dakota Department of Revenue | sdlegislature.gov |
| Tennessee | Yes | Tax clearance verification for termination. Tennessee Department of Revenue | Tennessee Department of Revenue |
| Texas | Yes | Form 05-305, Certificate of Account Status to Terminate Texas Registration. Texas Comptroller of Public Accounts | Texas Comptroller of Public Accounts |
| Utah | No | Utah State Tax Commission | Utah State Tax Commission |
| Vermont | No | Vermont Department of Taxes | legislature.vermont.gov |
| Virginia | No, but corporations certify taxes paid | Virginia Department of Taxation | law.lis.virginia.gov |
| Washington | Varies | Form REV 31 0037, Revenue Clearance Certificate Application. Washington Department of Revenue | Washington Department of Revenue |
| West Virginia | Varies | Written clearances requested by the Secretary of State. West Virginia State Tax Department | sos.wv.gov |
| WisconsinPage being checked | No official statement found | Ask the Wisconsin Department of Revenue | Wisconsin Department of Revenue |
| Wyoming | No | Wyoming Department of Revenue, Excise Tax Division | wyoleg.gov |
Where the answer varies
Most of the varies answers split by business type. New Jersey lets LLCs skip tax clearance and makes most corporations get one. Arizona and Washington also treat corporations and LLCs differently.
Confirm whether the state lists your company as an LLC or a corporation before you order anything. Each state page names the form and the agency.
States with no official statement found
For 5 states, the tax agency pages we read say nothing either way about clearance to dissolve. The table lists them as no official statement found and names the agency, because silence on a website is not permission.
Write to the agency, keep its answer with your closing records, and file only after you have it.
What comes after the tax step
The state filing itself is on our page on how to dissolve an LLC or corporation, state by state, with every checked state's form and fee.
The federal returns come with their own order and deadlines, which our final tax return list sets out. The closing checklist puts both in order for one state, records first.
Tax agencies change their rules and their forms. Confirm the answer with the state's tax agency before you file, and have your CPA or lawyer look at it. Vaultfish helps you run the process. We are not lawyers and this is not legal advice. If you need counsel who knows this area, we can point you to one. Ask for a referral
Questions about tax clearance to dissolve
Do all states require a tax clearance to dissolve a business?
No. Of the 45 states we have checked, 6 require a tax clearance before a business dissolves, 10 require it only for some businesses, and 27 do not require one.
What is a tax clearance for dissolving a business?
A tax clearance is a letter or certificate from a state tax agency saying a business has filed its returns and paid its tax. States name it differently. Texas issues a certificate of account status, New York a consent to dissolution and Pennsylvania a tax clearance certificate.
Does an LLC need a tax clearance to dissolve?
Sometimes. In several states the answer depends on the business type. New Jersey lets LLCs skip tax clearance while most corporations need it, and Arizona's tax certificate applies only to a corporation.
What if a state has no official statement on tax clearance to dissolve?
Ask the state's tax agency in writing before you file, and keep the reply with your closing records. Vaultfish lists such a state as having no official statement found and never reads the silence as a no.
