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Sales & Use Tax Tips for November 2010
PERSONAL SALES AND USE TAX LIABILITY IS NOT LIMITED TO OWNERS AND OFFICERS OF A COMPANY. EMPLOYEES MAY BE DEEMED RESPONSIBLE PERSONS TOO.
Can you be held personally liable if your company is not fully complying with each State's sales and use tax laws?
A couple of months ago we sent a sales tax tip discussing how a corporate officer can be held personally liable for a company's sales and use taxes. Did you also know that an employee of a company, who is not an officer, can be held liable? States tend to cast a wide net as to whom they deem responsible for filing sales and use tax returns and it is not limited to owners and officers. A salaried employee of a company who is responsible for filing sales tax returns could potentially find themselves on the hook for his or her company's multi-million dollar sales tax liability.
Typically, if a state is holding an individual employee personally liable, it is usually because the Company has been dissolved. If the employee was an officer or owner of the company it is likely the individual has already lost everything he/she contributed to the business and may have already filed or be on the brink of filing bankruptcy. Generally, state tax liabilities are not dischargeable in bankruptcy cases. If you're a salaried employee or an officer, imagine the personal impact this may have on your life and your future. If an individual doesn't have the financial means to pay immediately, he/she may have to endure a lifetime of dealing with the state collection efforts which could include wage garnishment, frozen bank accounts, liens on assets, or seizure of assets.
These assessments can be difficult to fight. However, having an assessment canceled is not impossible. Hiring an experienced and qualified sales and use tax consultants to evaluate whether the employee or officer has a defensible position is the first step. Even if the employee/officer has a favorable fact pattern, formal protests, conferences, and appeals may be necessary. Therefore, it is imperative that an individual have solid documentation. It makes sense to consult with professionals who have a prior history of success in removing these assessments and also have an in-depth knowledge of the possible defenses as well the various appeal alternatives.
Should you happen to find yourself in this position in the future or know someone who is we can assist in potentially removing the assessment. Further, some proactive sales and use tax planning now could also reduce the likelihood of this occurring to an employee or an officer in the future. To learn more about these or other services or should you have any other questions or require assistance please Contact us today. Or call 1-888-466-2829 to speak with an Olivier &
Associates Sales and Use Tax professional for a no-obligation consultation about your Sales & Use Tax issues.
Please click here for more Sales Tax Tips or visit our website at www.oatax.com for information. For additional insight on common sales tax concerns, please see the Did You Know? section of our website.
* This tip is intended to provide general information only and is not to be considered as a substitute for professional advice.
