TRENTON – Recent enforcement actions by Investigators for the Division of Taxation have resulted in the payment of $1 million in unpaid sales taxes by 49 New Jersey businesses. In many cases, consumers paid tax to businesses who pocketed the money instead of forwarding it to the State as required by law. Taxes owed by the businesses ranged from $4,700 up to $175,000.
"Consumers pay sales taxes with the good faith expectation that vendors will remit the tax to the State,” said Michael Bryan, Director of the Division of Taxation. “The vendors hold the money ‘in trust’ and may not borrow against or spend it for any purpose. Unfortunately, some vendors will abuse that trust, effectively stealing from their customers and unfairly shifting more of the tax burden that supports essential government services to law-abiding businesses and taxpayers.”
Although the Division of Taxation makes every effort to bring businesses back into compliance without disrupting ongoing business operations, in rare cases more aggressive enforcement actions, including seizure, is necessary to protect the public’s interest in fair and equitable tax administration. In August, the latest month for which figures are available, Taxation Investigators were compelled to seize businesses in four counties:
• A bagel/delicatessen in Bergen County;
• Pizzerias in Bergen and Ocean counties;
• A tree service in Union County,
• And an office furniture retailer in Monmouth County.
Business owners who are on a payment plan are notified that they could face seizure and potential liquidations of their assets if their debt to the State increases. In addition, failure to keep up with current tax obligations voids any previous agreement to resolve a past due amount.