Businesses that fail to pass along sales taxes collected from customers to the state could be next in line for the Indiana Department of Revenue's ramped-up enforcement efforts.
Agency spokesman Bob Dittmer said Friday the state has doubled the size of the staff enforcing sales tax collections and has improved the technology used to track delinquent businesses.
“We're really making sure there's a level playing field, that the marketplace is fair,” Dittmer said. “When you have a business not remitting sales taxes to the state, they can sell for less than the guy who's doing things right and that's not fair.”
Kokomo has seen evidence of the increased enforcement twice in recent months, as first Ducky's Restaurant and then Dave Evans Tire lost their ability to do business.
Both businesses owed hundreds of thousands in unremitted sales taxes, which means they charged customers sales tax but never remitted those sums to the state.
“That's not their money,” Dittmer said. “The customers paid the taxes to them to hold and then turn in.”
Evans also owed a considerable amount of income withholding to the state. The Indiana Attorney General's office went to court last month to obtain a restraining order against Evans, preventing him from taking on new customers or disposing of any assets until his tax bill is paid.
In court filings, state officials said Evans' failure to remit sales taxes started back in 1995 and continued into last year. All told, he owes more than $455,000.
“We probably should have caught this earlier. This should not have gone on this long,” Dittmer said of Evans' case.
“Years ago, when [the Dave Evans case] started, we did not have the technology capable of tracking these guys, nor did we have the personnel,” Dittmer said. “In the last 18 months, we've made significant improvements in our technology, as well as the emphasis being placed on this.”
Dittmer said the public will be seeing more cases, due to the changes.
“We just want them to remit their sales taxes. It doesn't do anyone any good to put them out of business,” he said.
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Copyright 2014 – Kokomo Tribune, Ind.
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Tags: Accounting, Sales Tax, Small Business, Taxes, Technology
