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For business owners and managers, keeping up with filing and paying sales tax is one of those business responsibilities that you do NOT want to let go by the way side. Just as Jeffery Roach, the 55 year old manager of Bottoms Up Tally, who got thoroughly bitten in the nether regions for not keeping up with Florida sales tax obligations. On Tuesday, May 9, 2017, Jeffery was arrest on not one, nor two counts, but TWELVE COUNTS including 10 counts for failure to file/pay sales tax returns, 1 count of failure to file six consecutive returns, and 1 count failure to remit sales tax between $300 and $20,000. All twelve are 3rd degree felonies with up to 5 years in jail each. According to the Tallahassee Democrat[i], the taxpayer failed to remit only $2,533.

In our law firm, we talk to a lot of business owners that get behind in sales tax. Almost any business can have a bad month or two in which the owner may pick or choose what bills to pay with an eye towards next month being better. Unfortunately, no one explains to you when you start a business that sales tax is simply one of those bills you don’t want skip. Sales tax is one of the few things that are truly not dischargeable in bankruptcy and can even land you in jail. Seriously, as ridiculous as it sounds, it only takes $301 of collected but not remitted tax to face 3rd degree felony charges and up to five years in jail.

Many business owners come into a sales tax delinquency thinking that sales tax is no big deal. Far too many business owners are not taking it seriously. Things I commonly hear are:

“I’ve paid hundreds of thousands of dollars in sales tax to the state – they should be thanking me!”

“What are they going to do, shut me down? Then they won’t collect a dime of this tax.”

“I never intended to steal sales tax. All our cash went to pay expenses keeping the business afloat.”

Let me tell you right now, these feeling are not what the Florida Department of Revenue has been trained to think about sales tax. First – the taxes collected by a business were paid by the customers of the business, not the business itself. So the business has not paid a dime of sales tax to the state, at least not on sales. Second – yes, the state will gladly shut you down for not remitting your sales tax. The DOR employees are taught to consider that if you can’t operate your business and remit tax properly, then they would rather shut you down and let another business owner operate the business properly. They are also taught to think that it is not fair that one business is using sales tax proceeds to operate the business while the competition remits tax properly. With this logic, it would be unfair to let the business using the sales tax to continue. Finally – it does not matter under Florida law that you didn’t benefit personally from failing to remit sales tax. If you collected more than $300 in sales tax, you knew you were supposed to remit the tax, and you did not remit the tax timely, then that is every element of the crime. Go straight to jail. Don’t pass go. Don’t collect $300. (Monopoly humor)

Don’t get me wrong – there can defenses to sales tax potential charges. Simply misunderstanding the law can be a defense. I’ve had clients that simply didn’t understand how to calculate sales tax. Someone taught them wrong and they just continued doing it the wrong way – resulting in a consistent under reporting or under remitting of sales tax. I’ve had clients with employees that stole tax and falsified sales tax returns without the owner’s knowledge. I’ve even had accountants file false returns thinking that is what the client would have wanted. Each case has its own set of circumstances that may provide a way to push a sales tax criminal investigation back into a collections matter. Whatever your situation, it is best to have a confidential conversation with an attorney that really knows sales tax law to evaluate your situation.

It is not common knowledge, but the Florida Department of Revenue has an entire division dedicated to investigating state tax crimes. These are usually ex-cops or ex-collectors, whose job is to investigate whether a business committed a crime. They are not there to help the business owner figure out what they owe and give them a chance to pay – a common misconception that ends up with charges filed against business owners far too often. The investigator is under no obligation to provide you with notice before showing up at your business. Nor is the investigator bound by taxpayer confidentiality the way most of the Department of Revenue is. So, an investigator can talk to your employees, your landlord, your customers, etc. I’ve seen investigators in the Orlando area start investigation by sending out “criminal investigation inquiry” letters to all customers of a business. The business owner learns about the investigation by all the calls from customers. Not exactly good for a business’s reputation. This feels like pure harassment, but it is legal harassment. Getting mad won’t help. Learn how to defend against the process continuing by talking to an attorney who understands both the sales tax and the criminal side of the equation.

Sales Tax Investigations can start several ways. Someone can turn you in, such as a disgruntled employee, ex-spouse, ex-partner, or even your competition. Take this as one more reason not to burn bridges. A sales tax auditor or collector can recommend your case be handled by the investigation division. The DOR may get a lead from data gathered from other sources, such as the DMV records for a car dealer or the liquor/cigarette purchases from the DBPR for a convenience store or liquor store. However the investigation starts, you need to take it very seriously from the moment you become aware of it. Don’t think you can smooth talk your way out of an investigation. Anything you say can be used against you. So politely say, I’d like to get an attorney to be part of this conversation. They are supposed to back off. If they don’t, then say it again – politely. I don’t recommend being rude to an investigator. Either way, this is not something that is simply going to go away. Get competent help asap.

You should understand that no industry that collects sales tax is immune from these criminal implications. The Department of Revenue arrests business owners in just about any industry you can think of. From car dealers and liquor store owners, to shoe repair shops, florists, and even computer repair shops. The size of the company does not matter either. I’ve seen people arrested from the owners of a little mom and pop grocery store to the CFO of a chain of restaurants. In other words, if your business is behind in remitting sales tax, then a criminal investigation is a real possibility. The last thing you want it to find out a sales tax criminal investigator left you a business card with your employees. If you are behind in sales tax, then get ahead of the situation by contacting a criminal sales tax attorney.

The Law Offices of Moffa, Sutton, & Donnini, PA have decades of experience representing business owners before the Florida Department of Revenue for Florida sales tax controversy. We handle everything from audits, protests, and litigation, to collections, revocations, investigations, and defense before criminal courts. If you have sales tax criminal problems, then you don’t want a criminal attorney that handles DUI’s. You want an attorney who understand the sales tax side of your case better than the assistant state attorney assigned to prosecute your case. Our lawyers work with investigators and the economic crimes assistant state attorneys around the state. We have a very good track record of having investigations closed out before charges are filed. Alternatively, your case may qualify for deferred prosecution agreements or PTI (Pre-Trial Intervention). Whatever stage your sales tax criminal case is in, our attorneys are here to offer a FREE INITIAL CONSULTATION to confidentially discuss the facts of your case. Contact us at the number on the top of this page now!

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About the Author: Mr. Sutton is a Florida licensed CPA and Attorney and a shareholder in the law firm Moffa, Sutton, & Donnini, PA. Mr. Sutton’s primary practice is Florida tax controversy, with an almost exclusive focus on Florida sales and use tax. Mr. Sutton worked for in the State and Local Tax department of Arthur Andersen for a number of years and has been an adjunct professor of law at Stetson University College of Law since 2002 teaching State and Local Tax and at Boston University College of Law in 2014 teaching Sales and Use Tax. Mr. Sutton is a frequent speaker on Florida sales and use taxes for the FICPA, Lorman Education, NBI, AAA-CPA, and the Florida Society of Accountants. Mr. Sutton is also co-author of CCH's Sales and Use Tax Treatise. Mr. Sutton is the President of the Florida Association of Attorney – CPAs and the State and Local Tax Chairman for the American Academy of Attorney – CPAs. You can learn more about Mr. Sutton in his Bio HERE.


FLORIDA SALES TAX – THEFT OF STATE FUNDS, published March 6, 2017, by Amanda Levine, Esq.

FORT LAUDERDALE CLUB OWNER – SALES TAX FRAUD ARREST, published January 9, 2017, by James Sutton, CPA, Esq.

FL SALES TAX CRIMINAL INVESTIGATION, published December 16, 2016, by Amanda Levine, Esq.


TAMPA BAY CONVENIENCE STORE OWNER ARRESTED FOR SALES TAX, published April 24, 2016, by James Sutton, CPA, Esq.

ORLANDO USED CAR DEALER ARRESTED FOR SALES TAX, published June 3, 2015, by James Sutton, CPA, Esq.

FLORIDA CPAs – YOUR CLIENT OWES SALES TAX AND THEY WILL BLAME YOU, published July 18, 2016, by James Sutton, CPA, Esq.

[i] “Bar Manger Charged with Failure to Pay State Sales Tax,” Tallahassee Democrat, by Democrat staff, published on May 10, 2017. Link to the article HERE.