FLORIDA SALES TAX - THEFT OF STATE FUNDS

Florida Sales Tax - Theft of State Funds

It is the legislative intent in Florida that it is a taxable privilege to be in the business of selling tangible personal property, or providing certain enumerated taxable services. As such, anyone in the business of selling these goods or services must collect sales tax from their customers, and remit to the State of Florida. Sales tax money is property of the state from the time of collection by a merchant from their customer. The money is considered trust funds, collected by a business for the benefit of the state, and failure to remit these trust funds over to the state is a crime. Section 212.15(2), Florida Statutes declares

Any person who, with intent to unlawfully deprive or defraud the state of its moneys or the use or benefit thereof, fails to remit taxes collected under this chapter is guilty of theft of state funds…

Penalties for Sales Tax Fraud - Theft of State Funds

$301 – $20,000:

• 3^rd degree felony
• 5 years in prison
• $5,000 in fines

​$20,001 –$100,000:

• 2^nd degree felony
• 15 years in prison
• $10,000 in fines

More than $100,000:

• 1^st degree felony
• 30 years in prison
• $10,000 in fines

Seems simple, but the reality of a charge for theft of state funds is complicated, and can cause aftershock that will resonate for years if not handled correctly. Specifically, unlike an audit, which is directed at a business, theft charges are brought against the business owner individually. This can lead to a criminal record, a stain on one’s reputation that can last a lifetime. If you have been contacted by a Florida Department of Revenue criminal investigation, then DO NOT TALK TO THEM. Go HERE to read an article that will educate you about the investigation process.

For any theft crime, the state has a burden to prove beyond a reasonable doubt that there was an intent by the taxpayer to deprive or defraud. This is no different for theft of state funds. It is a well settled proposition that as a baseline, the state must establish:

[a]n essential element of this crime, which must be established by testimony beyond a reasonable doubt, is that the taking was animo furandi, or with the intent to steal…

Cooper v. State, 82 Fla. 365, 90 So. 375 (Fla.1921).

This can be proven in multiple ways. Typically, the Department of Revenue investigator will get a subpoena for bank statements to show the business owner had the ability to pay. The Department’s investigator will also contact the business owner directly to request the books and records of the business to determine the responsible party, or parties, and what balance is due, if any.

It is not the norm that business owners end up in an investigation because they set out to steal from the state. Most business owners end up in this scenario because of some messiness with their books, and financial hardship. However, this creates another problem. Failure to keep records can represent another charge. Section 212.13, Florida Statutes, identifies that failure to keep books and records is a misdemeanor in Florida, and intentional destruction of records is a felony. Also, if the business has fallen behind in filing returns, each unfiled return is an additional felony. The prosecutor can tack these additional charges onto the felony for theft of state funds. Every prosecutor recommends a sentence based on a score sheet. A single felony charge for theft of state funds score very differently from a felony for theft, along with multiple misdemeanors for failure to retain records, failure to file returns, or a felony destruction of records charge. If the State offers a plea bargain, that plea can result in revocation of the sales tax certificate, or the business license. It is easy to see how this problem can spiral out of control very quickly, and the effects can take years to remedy.

Having an attorney involved at investigations, or once charges are filed, will streamline the process. Getting someone involved early is the best way to achieve a fair result out of an investigation, and gives the business owner the greatest likelihood of emerging from this ordeal unscathed. Writing a check for the tax due may seem like a large burden, however the alternative is far more expensive as it involves the potential for thousands of dollars in fines, court costs, the associated costs of probation supervision, the cost of an attorney to represent the accused in court and potential loss of the business license. If you have been contacted by the Florida Department of Revenue’s Investigations, or think they have reason to contact you, call for a free consultation. At the Law Office of Moffa, Sutton, & Donnini, PA, 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: Ms. Levine is an associate attorney with the Law Offices of Moffa, Sutton, & Donnini, P.A. Her primary practice area is Florida tax controversy, including criminal proceedings for state tax issues. Ms. Levine received a B.S. in Accounting from University of Central Florida. She spent several years working in public accounting before attending Nova Southeastern University Law School. She received her Juris Doctorate in 2014. During her time at Nova Law, Ms. Levine was the Executive Justice of Academics for the Moot Court Honor Society, as well as the Finance Chair. She was awarded by the National Order of the Barrister, a national honor society which encourages oral advocacy and brief writing skills. You may contact Amanda via email at AmandaLevine@FloridaSalesTax.com or 954-642-1088 or read more about her in her bio HERE.

Resources

Section 212.15 Florida Statutes – Theft of State Funds

Section 921.0024 Florida Statutes - Criminal Score Sheet

Additional Resources

GO TO JAIL FOR NOT PAYING FLORIDA SALES TAX?, published November 3, 2013, by James Sutton, CPA, Esq.

BRANDON FL RESTAURANT OWNER ARRESTED FOR SALES TAX, published September 19, 2015, by James Sutton, CPA, Esq.

FL TAX – VOLUNTARY DISCLOSURE CAN BE THE PERFECT SOLUTION, published October 5, 2012, by Jerry Donnini, Esq.

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.