Florida: Failure to Remit Sales Tax May Mean Prison
- Nov 12, 2013 | Gail Cole
Business owners act as agents of the state when they collect sales tax and remit it to the state. Failure to do so is against the law.
Last month, a Florida business owner was arrested on “first degree felony charges concerning theft of over $19,000 of sales tax allegedly collected but not remitted to the state.” If the charges are uphold, the owner of The Irish Pub and Grill on Main in Sarasota could spend up to five years in prison. The missing $19,000 would have to be remitted to the state, along with any applicable fines, interest and penalties.
Restaurateur as agent of the state
Under Florida law, restaurant owners must “collect sales tax on the sales of ready to eat meals, acting as an agent for the state.” Sales tax must be separately stated on all invoices, and “Florida law mandates that the taxes collected be the property of the state from the moment it is collect from the customer.” All collected sales tax must then be remitted to the state “in a timely fashion.”
According to the Florida Department of Revenue, “Restaurants are a significant source of sales tax revenue for the state of Florida and, as such, face close scrutiny from the Florida Department of Revenue.”
The Florida Department of Revenue takes tax evasion seriously, as you might imagine. In fact, the department states, “It surprises most business owners to know that the Florida Department of Revenue is dramatically more likely to arrest a business owner for tax fraud than the Internal Revenue Service (‘IRS’).” Indeed, in addition to putting tax liens on business property, the department “will also put the business owner in jail if the taxes and all associated penalties, interest, fines and costs are not remitted.”
The judge will decide whether or not the owner of The Irish Pub and Grill on Main Street deserves cell time. In the meantime, Florida taxpayers wishing to retain their freedom may want to switch to an automated sales tax solution.
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