Sales Tax and Use Tax Collections

Collection Program

I. POLICY

Sales and Use Tax License cancellation/revocations are the result of a process of license revocation hearings which are initiated by the Compliance Division. As a result of the hearing, the Hearing Officer issues a Notice of Decision setting forth the results of the hearing and payment terms that are acceptable to the Comptroller’s Office. Failure to comply with the Hearing Officer’s mandate constitutes sufficient cause to revoke the Sales and Use Tax License which has been issued to a business or individual.

When the revocation decision has been made, the only remedy for the licensee is to pay the outstanding liability and provide any delinquent tax returns which may be due. At the request of the Compliance Division, and after a hearing has been convened, FEB agents assist with the collection of any money and tax returns which are due to the Comptroller, by visiting the business which was the subject of the revocation.

II. PROCEDURES FOR SALES & USE TAX LICENSE REVOCATIONS

Agents assigned these cases must follow procedures to ensure that the Comptroller’s Office is fulfilling legal and regulatory mandates. Agents should respond to the businesses and contact the owner. The owner should be advised of the reason for the visit and should be notified that their Sales and Use Tax License is subject to revocation. The Agent should not attempt to set up payment plans on behalf of the Compliance Division or argue the merits of the decision. The primary reason for an Agent to visit the business is to either collect the necessary money to satisfy the Compliance Division’s request or to seize the business’ Sales and Use Tax License. If the business owner cannot make the satisfactory payment during the initial visit but indicates he/she can make the payment within a reasonable about of time (no more than 21 days), the agent will return to the business within that time frame and collect the amount of money due. If at that time the business owner is unable to make satisfactory payment, the Sales and Use Tax License should be seized, a notice of Sales and Use Tax License revocation form should be issued, and the owner notified to cease operations until satisfactory payments have been made. Each collection/revocation order assignment may differ somewhat, but the following procedures should be completed for each:

A. Sales & Use Tax collections/revocations will be assigned to agents according to geographical assignment areas and/or at the discretion of a supervisor.

B. Agent supervisors will ensure each collection is logged into the Sales & Use Tax collection/revocation sequence database, and that a license revocation control sheet has been attached to the documents provided by the Compliance Division. The paperwork necessary to complete the assignment will then be provided to the agent. Any special instructions relative to the assignment will be forwarded to the assigned agent. The amount of the payment due from the business to the Compliance Division will be noted on the appropriate forms.

C. Agents have thirty days to complete these assignments. Documented extensions to the 30-day period may be granted by a supervisor if it is determined that a payment, acceptable to Compliance, has a likely probability of being collected and avoids shuttering a business.

D. When the assignment is complete, the control sheet (white and yellow copy), and any additional attachments (i.e., seized license, copy of receipts issued, etc.) will be turned in by the assigned agent to the appropriate agent supervisor.

E. The appropriate agent supervisor will review the documents turned in by the assigned agent and verify accuracy and completeness. The agent supervisor will log the case as closed in the sequence database and the Agent In-Charge will forward the completed Sales & Use Tax revocation packet to the manager of the Collections Unit of the Compliance Division.

F. If the business owner cannot or will not pay the required amount of the tax liability, he/she will be asked to surrender the Sales and Use Tax License.

G. If the business owner refuses to surrender or cannot locate the Sales and Tax Use License, the agent will attempt to have the owner attest to such by signing the affidavit form. If the business owner refuses to sign, the agent should note the refusal on the affidavit form and advise the owner that they must close the business.

H. If the business refuses to close, the agent should note the information on the control sheet. It is not the responsibility of the Field Enforcement Bureau to ensure that the business complies with the order; the Compliance Division ultimately has that responsibility. However, once the Sales and Use Tax License has been revoked, agents may issue citations to any business which continues to operate without the license. Each day the business operates without the license constitutes a separate offense.

I. If an agent determines a business which is the subject of a collection/revocation assignment has closed, the agent will attempt to obtain an approximate date the business closed; that information may be used later by the Compliance Division to calculate additional fines, late payments, etc. If the agent determines the business has moved, attempts should still be made to make any necessary collections. The new address should be noted on any paperwork which is later forwarded to the Compliance Division.

III. CANCELLATION

None.