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If Your Name Is on the Return, You’re Responsible

  • Feb 9, 2015 | Gail Cole

 Know what you're signing.

A recent decision released by the Ohio Board of Tax Appeals reminds that if you file Ohio sales tax returns and sign your name to checks, you are probably going to be held financially responsible for those returns. So be careful what you sign.

The Tax Commissioner of Ohio, “managed the day to day operations of the business [Big Daddy’s Drive Thru] during the audit period.” The appellant insists that she was not involved in daily operations. Instead, she claims that the store was being managed by another woman, April Ramahi, “who independently determined the sales tax due and reported that amount to appellant who then paid the stated amount.” 

In addition, the appellant says that her then husband and Ms. Ramahi “were engaged in fraudulent activity with regard to the convenience store.”

The appellant described a situation in which “her involvement with Big Daddy’s Drive Thru was merely on paper and the result of pressure from her then husband.” She was not, she said, “involved in the day to day operations.”

But she filed the returns and signed the checks.

The Ohio Board of Tax Appeals is not unsympathetic to the appellant’s situation, particularly the “coercion by her ex-husband.” Yet because of her role, the Board determined the following:

“Appellant clearly had financial responsibility for Big Daddy’s Drive Thru, as evidenced by her signing checks, filing sales tax returns, and was listed as president of the store’s ownership entity…. Moreover, delegation of the day-to-day business responsibilities to another, i.e., April Ramahi, does not relieve one of the responsibility under R.C. 5739.33.”

R.C. 5739.33 Personal liability for tax, reads in relevant part:

“If any corporation, limited liability company, or business trust required to file returns and to remit tax due to the state under this chapter… fails for any reason to make the filing or payment, any of its employees having control or supervision of or charged with the responsibility of filing returns and making payments… shall be personally liable for the failure….”

Filing sales tax returns should not be taken lightly. Implementing sales tax Software-as-a-Service facilitates transaction tax management and increases compliance. Learn more.

photo credit: Signature via photopin (license)

Sales tax rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.
Gail Cole
Avalara Author
Gail Cole
Gail Cole
Avalara Author Gail Cole
Gail began researching and writing about sales tax in 2012 and has been fascinated with it ever since. She has a penchant for uncovering unusual tax facts, and endeavors to make complex sales tax laws more digestible for both experts and laypeople.