Are restaurants shut down for unpaid taxes more often than other businesses? A recent article in the Albany Times Union looked at the high number of restaurant closings every year for nonpayment of sales or withholding taxes.
Why are restaurants seized so often? Constant cash flow issues and low-profit margins characteristic of the industry can make it hard to stay on top of sales tax payments. Unfortunately, if restaurant owners fail to address their tax issues promptly, they risk losing their businesses. In addition, they may find themselves with personal liability for unpaid taxes as a “responsible person” under sales tax laws.
New York State also can suspend a taxpayer’s New York State Driver’s License if (1) a taxpayer owes $10,000 or more in taxes, penalties, or interest, and (2) no collection resolution is in place (such as an installment payment agreement, income execution or offer in compromise).
There are ways to resolve your dispute, including taking advantage of New York State’s Voluntary Disclosure and Compliance Program.
To learn more about how you can protect your restaurant, check out our article published by the New York State Restaurant Association, Don’t Lose Your Restaurant Because of Unpaid Taxes: Three Things You Need to Know.
If you are subject to a New York State sales tax audit or behind on your taxes, contact us for a consultation.