STATE & LOCAL TAX
Our lawyers represent clients in State/Comptroller franchise tax, sales and use, and property tax issues in administrative proceedings and state courts.
We have extensive experience in:
Managing state audits
Prosecuting property tax valuation and classification appeals through the administrative hearing and review process
Negotiating state and local tax settlements
Property tax matters including sheriff foreclosures
Sales and use tax including tax collection efforts
Delinquent Franchise Tax
Intentionally Failing to File a Report, Substantially Understating Tax & Records
Personal Liability for Texas/Comptroller Sales Tax Debts of a Business:
The Texas tax code contains numerous provisions that impose personal liability for a
business’s unpaid tax debts. Texas law imposes personal liability on the individual who collected the
taxes when a business collects taxes but does not pay them over to the state. Personal liability
applies to any money represented to be a tax, as well as to penalties and interest. The provision
also extends to persons serving in a controlling or supervisory role.
Anyone who supervises or controls the collection, accounting, or payment of a tax can be subject to personal liability. This includes any directors, officers, or employees of a business who have any role in the company’s financial affairs. Several factors determine whether one's supervision or control is sufficient to subject one to personal liability. Did you: (1) prepare tax returns, (2) sign tax returns, (3) have the authority to write checks on the corporation’s account or accounts, (4) have the authority to enter into and/or approve contracts on behalf of the corporation, (5) have the authority to receive and disburse funds on behalf of the corporation, or (6) hold an ownership interest in the corporation?
Second, whether one could be held personally liable also depends on whether the
sales tax was actually collected from customers. To hold you personally liable, the State
must prove the actual amount of taxes collected or received by your company. The State
has the benefit of a legal presumption, which arises when a company files a tax report showing
that tax is due. In that instance, the law presumes that the company collected the tax due.
In many cases, the Comptroller will also introduce invoices, receipts, and bank deposits
as proof that a business actually collected tax from its customers. The Comptroller could use the
business’s tax reports and financial records as proof that a business failed to remit collected
taxes. Please contact Davis Law & Associates, so we may help with your defenses available.
IF YOU OR YOUR BUSINESS ARE FACING STATE SALES TAX ENFORCEMENT, CONTACT GHATREHEE LAW FIRM PLLC AS SOON AS POSSIBLE SO WE CAN HELP!