QUESTION
What does a S-Corp legally need to pay in back sales tax to a muni? Is the S-Corp liable?
Asked on Feb 27th, 2020 on Taxation - Colorado
More details to this question:
We are a small (4 of us) S-Corp & have been requested to pay unpaid sales tax for a muni for previous years. The muni also told us we shouldn't have been able to pull a permit (electrical permit) without paying the sales tax before we are allowed a permit. How responsible is the company for this liability? If the S-corp is liable, for how many years back?
1 ANSWER
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For the sales taxes in your questions, you are generally dealing with a couple aspects:
1. Is Sales tax applicable under the rules and if yes what is the amount due.
2. If applicable, is it still due or does the statute of limitations on collections applies.
3. Who are the reasonable parties who woudl be liabile to pay the sales taxes.
In general, when you are discussing sales taxes and responsible parties you need to reveiw the specific taxing jurisdictions rules. Depending on the rules, not only can the corporation be held liable for the sales taxes but also responsible parties such as officers and directors can be held personally liable.
Answered on Mar 12th, 2020 at 1:33 PM