Restaurants are frequent targets of restaurant sales tax audits and seizures for nonpayment of taxes. Running a restaurant is challenging. Low-profit margins and constant cash flow needs are a reality and sometimes owners fail to pay their taxes on time. Unfortunately, when they don’t address their tax issues promptly, they risk losing their business.
The consequences for failing to collect and/or remit sales tax are severe.
Penalties and interest as high as 14.5 percent may be imposed for not paying sales tax owed to New York. The business could also have its Certificate of Authority revoked and individuals could face criminal prosecution. In some cases, certain owners, officers, directors, employees, partners, or members (responsible persons) of a business can be held personally liable for the sales tax owed by the business.
New York has an arsenal of tools to collect back taxes including warrants, levies, income execution, and seizures. In addition, individuals can lose their driver’s license.
If you haven’t collected or paid sales tax, you may qualify for New York’s Voluntary Disclosure and Compliance Program. The State will not impose penalties or bring criminal charges against eligible taxpayers with a history of noncompliance who come forward and pay their outstanding tax liabilities. As an added incentive, qualified taxpayers are also eligible for a limited look-back period.
Learn more in our article – Don’t Lose Your Restaurant Because Of Unpaid Taxes: Three Things You Need to Know – published by the New York Restaurant Association.
If you owe sales tax, schedule a consultation with us.
If you owe restaurant sales tax, download our Tax Helpline app and schedule a free 15-minute consultation.
“Steps You Can Take When You Can’t Pay Your Taxes” – Restaurant Association
“New York Sales Tax Litigation: 2019 Review” – Nassau Lawyer
“Protect Your Business and Your Wallet in a Sales Tax Audit” – DAVO Technologies
“8 Consequences Restaurants Should Know About Unpaid Sales Taxes” – Upserve
“3 Simple Steps to Documenting Tax Exempt Sales and Avoiding Liability” – Total Food Service
“Don’t Lose Your Restaurant Because of Unpaid Sales Taxes” – Long Island Weekly
“Sales Tax Rules Change for Resale of Restaurant-Type Foods” – Total Food Service
“Is Using Sales Tax Revenue to Run Your Business a Wise Investment?” – Automated Sales Tax
“Your Business Owes Sales Tax: Are You Personally Liable?” – Total Food Service
“Making Sense of Sales Tax Exemption Certificates” – Total Food Service
“Buying a Restaurant? Watch Out For The Seller’s Sales Tax Liabilities!” – Total Food Service
“New York Restaurants Among Top 250 Delinquent Taxpayers” – Bloomberg BNA
“Want to Avoid a Messy Sales Tax Audit? Good Recordkeeping is the Key” – Total Food Service
“5 Things Restaurant Operators Must Know About Taxes and Personal Liability” – Restaurant Hospitality
“Don’t Lose Your Restaurant Because of Unpaid Taxes: Three Things You Need to Know” – Modern Restaurant Management