On September 25, 2014, [name omitted], owner of Naples Petroleum 102, Inc. located in Naples, Florida because he allegedly failed to file six sales tax returns and failed to remit the sales tax collected from customers. Specifically, he filed to file or pay sales tax for the periods October 2011 through March 2012 and June 2012 through May 2014.
The Seminole County Sheriff's Office made the arrest on the failure to file six returns charge, which is a felony punishable by up to five years in jail. The Temple Terrace, Florida resident faces up to 5 years in prison and up to $5,000 in fines in addition to repayment of any taxes, interest, and investigation expenses. The failure to remit the taxes could result in a separate felony charge being filed. It only takes $301 of collected but not remitted tax to become a 3rd degree felony.
Florida law requires restaurant business owners that charge sales tax on their food, beer, cigarette sales to act as a sales tax collection agent to the state. Whether the business wants to or not it must charge tax, collect it on the state's behalf, and then turn it over by the 20th of each month. 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. Convenience store owners often keep tax funds in order to fund losses and expenses and attempt to make up the difference the following months. If the next month is worse or the same then the situation can quickly spiral out of control.
PLEASE NOTE: The Florida Department of Revenue is focused on the Convenience Store industry and has been since 2012. We'll over 1,000 stores have been audited for sales tax underreporting with hundreds of millions of dollars of assessments being issued. We've received word from high levels within the Department that more focus will be placed on criminal investigations and arrests.
Sales tax collected but not remitted is a crime under Florida law and must be taken extremely seriously. 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"). While both the IRS and the Florida Department of Revenue will put tax liens on the business property (called a "Tax Warrant" in Florida), the Florida Department of Revenue will also put the business owner in jail if the taxes and all associated penalties, interest, fines, and costs are not remitted.
There are mechanisms and programs in place that allow individuals or their state and local tax attorney to negotiate with the state to enter into a payment plan. If you or your client 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. Equally important, there is no accountant client privilege in Florida for crimes so accountants should not put themselves in a precarious situation. 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. SUTTON IS A FLORIDA LICENSED CPA AND ATTORNEY AND A SHAREHOLDER IN THE LAW FIRM the Law Offices of Moffa, Sutton, & Donnini, P.A. MR. SUTTON IS IN CHARGE OF THE TAMPA OFFICE FOR THE FIRM AND HIS PRIMARY PRACTICE IS FLORIDA SALES AND USE TAX CONTROVERSY & CRIMINAL DEFENSE. MR. SUTTON WORKED FOR THE STATE AND LOCAL TAX DEPARTMENT OF A BIG FIVE ACCOUNTING FIRM 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, ACCOUNTING FOR LAWYERS, AND FEDERAL INCOME TAX I. YOU CAN READ MORE ABOUT MR. SUTTON IN HIS FIRM BIO.
ADDITIONAL RESOURCES
FL TAX ALERT – CONVENIENCE STORE OWNERS TARGETD!!!!, published August 16, 2012, by James Sutton, CPA, Esq, and Jerry Donnini, Esq.
FL DOR CONTINUES C-STORE ONSLAUGHT FOR FLORIDA SALES TAX, published May 17, 2014, by Jerry Donnini, Esq.
CLOSE A BUSINESS TO AVOID LARGE FL SALES TAX ASSESSMENT?, published July 7, 2013, by James Sutton, CPA, Esq.
WHEN A CLOSED BUSINESS ISN'T CLOSED TO FL DOR, September 26, 2014, by Matthew Parker, Esq.
FL TAX – VOLUNTARY DISCLOSURE CAN BE THE PERFECT SOLUTION, published October 5, 2012, by Jerry Donnini, 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.