Personal Liability for a Company’s TPT

Yesterday I had the opportunity to attend the ASCPA’s CPE class on Arizona Sales and Use Taxes. The seminar was conducted by Mr. Jim Susa, JD, LLM, CPA, Esq. and was very informative. On important item he discussed was an Arizona Supreme Court opinion issued on April 9, 2008 that was brought up in the case of Department of Revenue v. Action Marine, Inc.  The Arizona Supreme Court held that the government could hold officers and directors of companies directly liable for paying collected but unremitted transaction privilege taxes if the taxes had been listed as an additional charge on the company’s invoices or sales receipts. The court did rule that the officers or directors could only be held liable for the transaction privilege tax and not for interest or penalties. Since corporations and limited liability companies are usually set up to avoid personal liability for the organizations debt this case could affect the decision of a professional considering a position as an officer or director of an organization.

 

Robert K. Minniti, CPA, CFE, Cr.FA, CFF, MBA

www.minnitiaccounting.com

www.linkedin.com/in/robertminniti