ORLANDO SIGN COMPANY OWNER JAILED FOR MERE $1,500 SALE TAX
On June 23, 2014, the Florida Department of Revenue ("FDOR") announced [name omitted], was arrested by the Orange County Sheriff's Office. The charges were that he allegedly collected a mere $1,500 in sales tax from customers and failed to send to the state. The sign company owner, an Orlando resident, was charged with a felony count and faces and faces up to 5 years in prison, up to $5,000 in fines, and potential penalty and investigative payment liabilities.
According the FL DOR's press release, [name omitted], owner of Signexpress USA, Inc. collected tax from his customers at his Orlando business. However, from September 2009 through June 2013, he failed to file tax returns and remit all the tax collected to the state. It is worth pointing out that collecting and not remitting over $20,000 is a second degree felony, and an amount over $100,000 is a first degree felony offense.
Florida law requires business owners that sell, repair, rent, or provide services to act as an agent to the state and they must remit all sales tax collected to state of Florida. Car dealers 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. Car dealers throughout South Florida are at risk because the FL DOR has records directly from the DMV as to exactly which vehicles are sold by a dealer. Therefore, if a dealer reports less in taxes than is reported in sales by the DMV, many car dealers in Palm Beach, Broward, and Miami-Dade counties are at risk on a daily basis.
Further, Florida sales tax is required to be separately stated on the customers invoice and Florida law mandates that the taxes collected be the property of the state from the moment it is collected from the customer. Therefore, despite putting these amounts in their own checking accounts, business owners must segregate sales tax collect and remit it to the state in a timely fashion.
The Executive Director was quoted saying:
It is an honor to serve the vast majority of Florida businesses who comply with State tax requirements. For those that don't, it is our job to enforce the law and ensure honest businesses are not placed at a competitive disadvantage by those who ignore the law or worse intentionally collect and steal taxpayer dollars
Collecting but not remitted Florida sales tax is a crime under Florida law and must be taken extremely seriously. It is shocking to many 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"). While both the IRS and the FL DOR will put tax liens on the business property (called a "Tax Warrant" in Florida), the Florida Department of Revenue will also charge and put the business owner in jail if the taxes and all associated penalties, interest, fines, and costs are not remitted.
If the above paragraph doesn't grab your attention, then hopefully the facts of the news release do. The State arrested the individual on the charge he stole more than $1,500 in sales tax over roughly a four year period. The amount involved in this arrest equals out to less than $21,500 in sales. And, the State indicated a period of roughly forty-six months. Factor that into the sales amount in question and that averages out to less than $500 per month in sales where tax was allegedly collected but not remitted. This current new release may indicate how aggressively the State is now pursuing taxpayers who collect but don't remit tax. It is not hard to imagine a situation where a small business experiences a couple rough months where cash is tight and it struggles to meet current expenses to stay open. This press release should cause great concern for the business that finds itself unable to remit all of the sales tax it collected lest the business owner experience the same fate as this one in Orange County.
If you or someone you know has collected but not remitted Florida sales tax, then please contact an attorney experienced in Florida sales and use tax criminal defense for a confidential conversation to discuss his or her options. There are mechanisms in place that allow individuals or their attorney to negotiate with the state to enter into a payment plan. While the monetary sanctions can be harsh, it is better than losing one's freedom. Like any other crime, anything said by you is an admission and can be used against you at a criminal trial. Therefore, it is wise to have an attorney speak on your behalf.
At the Law Office of the Law Offices of Moffa, Sutton, & Donnini, P.A., our primary practice area is Florida taxes, with a very heavy emphasis in Florida sales and use tax. We have defended clients against criminal charges related to Florida sales and use taxes for more than 20 years. In fact, the only criminal cases we handle are related to Florida sales and use taxes. Our partners are both CPAs and Attorneys, so we understand both the accounting side of the situation as well as the legal side. We represent taxpayers and business owners from the entire state of Florida. Call our offices today for a FREE INITIAL CONSULTATION to confidentially discuss how we can help put this nightmare behind you.
About the author: Mr. Parker is a sales and use tax attorney and an associate in the law firm the Law Offices of Moffa, Sutton, & Donnini, P.A., based in the firm's Tampa office. Mr. Parker's practice includes state tax audits and controversies involving sales and use tax and all other state taxes including communication service tax, cigarette & tobacco tax, motor fuel tax, and Native American taxation. Mr. Parker received his law degree and L.L.M. in Taxation from the University of Florida. If you have any questions please do not hesitate to contact him via phone or email listed on this page.
ADDITIONAL RESOURCES
FL TAX ALERT – CONVENIENCE STORE OWNERS TARGETED!, August 16, 2012, by James Sutton, CPA, Esq., and Jerry Donnini, Esq.
TAMPA JEWELRY STORE MANAGER ARRESTED FOR SALES TAX THEFT, August 30, 2012, by James Sutton, CPA, Esq.
MIAMI AUTO REPAIR SHOP OWNER ARRESTED FOR SALES TAX, August 25, 2012, by Jerry Donnini, Esq.
FT. MYERS BUINESS OWNER ARRESTED FOR FAILING TO REMIT ONLY $8,000 IN SALES TAX COLLECTED, August 11, 2012, by James Sutton, CPA, Esq.
FL DOR'S GREATEST WEAPON – REVOCATION OF DEALER'S SALES TAX CERTIFICATE, August 6, 2012, by Jerry Donnini, Esq.
CRIPPLING PENALTIES UNDER FLORIDA SALES AND USE TAX LAW, July 19, 2012, by James Sutton, CPA, Esq.
WHAT SERVICES ARE SUBJECT TO SALES TAX IN FLORIDA, May 1, 2012, by James Sutton, CPA, Esq.
© 2014 – All Rights Reserved – the Law Offices of Moffa, Sutton, & Donnini, P.A.