Fact Sheet
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GO!NG OUT OF BUSINESS SALES
FACT SHEET FOR LICENSE APPLICANTS
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1. New York State law requires that a license be
obtained before advertising a going out of business sale.
This rule applies whenever a merchant leads the public to
believe the sale: (1) will precede the abandonment of a
business location; "(2) results from death, business failure or
other adversity; or (3) involves merchandise d~aged by fire,
smoke or wate:r-.
2. The la'W" is designed to protect the p~::':l:..c :;:!~.~j~
misrepresentation. Licenses will only be issued to those
persons who have legitimate reasons for conducting such sales.
Merchandise cannot be added to that on hand at the time when
the necessity, which is the occasion of the sale, arose. To
further prevent misrepresentation, the duration of such sales
is limited to thirty consecutive calendar days. If, after
thirty days; some of the merchandise on hand when the sale
commenced remains, one thirty-day renewal period is allowed.
3. An application must be made in writing, under oath, to
the licensing authority (clerk) of the appropriate city, town
cr village in which the sale is to be held. A detailed
inventory of the merchandise to be offered at such sale must
accompany the application.
4. An application to conduct a "closing out sale" or
"defunct business sale" must be filed at least 15 days before
the s~le. ~n application to sell damaged goods may be made at
any t.lme prJ.or to the sale. An application for renewal shall
he made not more than ten days prior to the date of the
expiration of the license.
5. A $500 fee ($50 renewal) is required with the
application. One hundred per cent of the fees are returned to
the applicant provided the license is not revoked and the
store is closed within sixty days. Within thirty days after
the sale, ~ statement must be filed with the clerk stating the
t~tal :e~a~l value of the unsold merchandise and the ultimate
~LSposl~~on thereof. Sale records must be kept open for
~nspect1on by the clerk for one year.
. 6., A license only applies to the on$ location for which
~t waS.1ssued,. and no other store, branch/ or warehouse may
advert1se it is participatinq in the lic~nsed sale.
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7. Any aever~isement must contain the license number,
expi~ation da~a and, i: applicable, the location where the
business is to be resumed. A copy of the application,
including the inventory which must be filed with it, shall be
posted conspicuously where the sale is held.
8. Violations of this law are rnisd~eanors punishable by
a fine of $250 or imprisonment for one year or both, and each
day upon which any sale is conducted in violation of the law
shall be a separate v~olation.
9. For full details, refer to New York State Gene~al
Business Law, Artic~e 29-F.
4/91 NYSTCA
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