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Sales & Use Tax Tips for April 2009
SALES TAX - PASS IT ON!
You collect sales tax, but you’re short on cash… Don’t get tempted to use the funds for your own business expenses!
These are trying times for many businesses. Cash and credit are in short supply. Sales tax revenues collected on behalf of taxing jurisdictions may seem like a tempting source of available funds to manage immediate operating needs.
Our advice? Don’t even think about it! Don’t dig yourself deeper into a hole you may never recover from. Sales tax is considered a trust or fiduciary tax. It is never your money. It is your customer’s obligation to pay it. You are the pass through entity. If you collect, but fail to pay over the funds properly, you put yourself and your own business at risk. If you are caught, any sales taxes due can become your personal liability along with penalties and interest that could become insurmountable. Criminal charges could result if intent to defraud is shown.
Unfortunately, too often, we see the results when such decisions are made. They are never good. Businesses may even want to consider establishing a separate account to ensure collected funds do not get caught up in any banking difficulties.
If you have already put yourself in such a position, we strongly urge you to get professional advice immediately, before the situation worsens or respective revenue departments discover it.
Our professionals can help you sort through Exposure Resolution options.
Click here for more Sales Tax Tips or visit our website www.oatax.com. For additional insight on common sales tax concerns, please see the Did You Know? section of our website.
Should you have 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.
* This tip is intended to provide general information only and is not to be considered as a substitute for professional advice.
