Telecom Tax Blog

    Don't Stop at Tax Calculation and Collection - Be Sure to Remit

    Posted on Wed, Sep 26, 2012 @ 11:02 AM

    At SureTax®, we focus on telecom tax calculation.  Calculation is but one step in the process that begins with laws and ends with funds being remitted to the jurisdiction.

    As your business grows and consumes cash in the process, make sure your billing, tax management, and remittance policies are all in place and working properly.  It is easier than you think to find yourself using tax revenue as a source of funds, accidentally or out of a perceived necessity.  While we know that early stage businesses often require creative solutions to the ever occurring challenges, sales tax is one area in which you must have a conservative approach.  

    Here's why:

    As a business, when you collect tax on your service, you are acting as an agent of the taxing authority. So, for example, if you collect state tax in Florida, you are collecting tax on behalf of the State of Florida.  The tax you collect is not your money, it's Florida's money.

    It's not a loan.  It's not profit.  It's not next week's payroll or the new server you need.  It's Florida's money.  Period.  Florida is very serious about this, and so are most jurisdictions throughout the country.

    As an example, here is Florida's legal code, just to make it perfectly clear how this one state feels about their sales tax revenue.

    § 206.56. Unlawful use of tax collected; theft of state funds

    (1) Any person who knowingly obtains or uses, or endeavors to obtain or use, taxes collected pursuant to this chapter, with the intent, either temporarily or permanently, to deprive the state of a right to the funds or a benefit therefrom, or appropriate the funds to his or her own use or to the use of any person not entitled thereto, commits theft of state funds.

       (2)(a) If the total amount of revenue involved is $100,000 or more, the offense is a felony of the first degree, punishable as provided in s. 775.082, s. 775.083, or s. 775.084.

       (b) If the total amount of revenue involved is $20,000 or more, but less than $100,000, the offense is a felony of the second degree, punishable as provided in s. 775.082, s. 775.083, or s. 775.084.

       (c) If the total amount of revenue involved is $300 or more, but less than $20,000, the offense is a felony of the third degree, punishable as provided in s. 775.082, s. 775.083, or s. 775.084.

       (d) If the total amount of revenue involved is less than $300, the offense is a misdemeanor of the second degree, punishable as provided in s. 775.082 or s. 775.083. However, any person who commits theft of state funds involving less than $300 and who has previously been convicted of any theft of state funds is guilty of a misdemeanor of the first degree, punishable as provided in s. 775.082 or s. 775.083. Any person who commits theft of state funds involving less than $300 and who has previously been convicted two or more times of any theft of state funds is guilty of a felony of the third degree, punishable as provided in s. 775.082, s. 775.083, or s. 775.084.

    That's right.  If you use over $300 of Florida's sales tax revenue for your own purposes, even TEMPORARILY, you have committed a felony.   

    States, especially Florida, are much more likely to imprison offenders for unlawful conversion of tax revenue than is the federal government.  Here's an example - In August, the State of Florida arrested a Ft. Myers convenience store owner for failing to remit $8,000 in sales tax.  That owner now faces up to 5 years in prison and up to $5,000 in fines as well as potential repayment of stolen tax, penalties, interest, and investigative costs.

    Bottom line...  Remit your tax revenue promptly.  The Governor wants his money, now!

     

     


    Tags: telecom taxes, telecommunications tax, Sales tax

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