Personal Liability for Corporate/LLC Sales & Use Taxes – A Reminder

As a lovely reminder of how scary the audit risks are if the Marketplace Fairness Act passed,  I received a reminder of it in the mail today from the California State Board of Equalization (BOE).  Standard form BOE-162.

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IMPORTANT NOTICE

Personal Liability for Corporate and Limited Liability Company Sales and Use Taxes

Did you know as a corporate director, officer, member, manager, or other person having control or supervision of the filing of returns or payments of taxes, you may become personally liable for any unpaid sales and use taxes, interest, and penalties?

Section 6829 of the Revenue and Taxation code provides that the State BOE may pursue collection action against certain corporate or limited liability company personnel for any unpaid corporate sales and use tax liability.

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One state is bad enough.  The risks of mistakes suddenly  ramping up from 1 state to potentially 46 states is very scary.

UPDATE: In this case, the primary issue for me is our exposure going from 1 to 46 states, not the personal responsibility part of it so much.  This notice and the part of CA law it references is primarily (but not entirely) aimed at bad guys.  As I’m not a bad guy (unless you’re pro-MFA, then opinion might be different),  so it isn’t a big deal to me.  But I don’t know what the laws are for the 45 other taxing states.  When can they “pierce the corporate veil”?

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