The U.S. Supreme Court’s ruling in South Dakota v. Wayfair, Inc., 138 S. Ct. 2080 (2018), has led to significantly increased exposure to sales tax for businesses with interstate sales.
This increased exposure to sales taxes on interstate sales could lead to a substantial increase in exposure to personal liabilities for individuals deemed to be responsible persons.
Sales taxes are trust fund taxes that the collector holds in trust for the state until remittance.
Sales tax obligations do not necessarily stop at the entity level but can go to owners and responsible persons. Business owners who formed corporations or limited liability companies (LLCs) to protect themselves from personal liability may be a responsible person, individually liable for uncollected sales tax.
Companies with interstate sales must review potential exposure to sales tax collections and, if needed, take appropriate corrective actions.
Failure to review sales tax exposure and take corrective action if appropriate can present significant personal liability for a responsible person.
This post was written by Larry Blair
