Business Tax Lawyer
Planning & Representation
One of the most important aspects of properly conducting business operations in Connecticut is understanding the business tax system of our State. Connecticut business tax law is different from any other state and is the most important business compliance factor to get right from the start.
If you happened to have made a mistake when it comes to your taxes, we are here to help. While the CT DRS is even more aggressive than the IRS at collecting unpaid business taxes, not all hope is lost. Depending on the type and severity of the business tax debt, there may be multiple resolution options available to you.
Business Sales & Use Tax
Almost everybody knows that when you sell products in Connecticut you need to charge sales tax and then send it back to the State. But not many people know that Sales Tax can range from 6.35% to 10% in Connecticut depending on what you are selling. Also, Connecticut has a Sales Tax on Services, but not all services. Knowing which Sales Tax permit you need and which sales tax percentage to charge is an important first step to setting up your business in Connecticut.
Use Tax is a very different tax and one that very few business owners I have spoken to understand. Use Tax covers products or services that a business purchases for resale but then consumes itself. Let’s say you are a carpenter and you build decks. You buy lumber from your supplier at wholesale prices and don’t pay sales tax on it. This is because you will be charging sales tax to your customer when you sell them the lumber. But then instead of using some of the lumber to build a deck for a client, you use it to build a lumber storage shed for your business. Your business would need to pay Use Tax on the lumber that it purchased for resale but then USED itself.
When you collect Sales Tax you are holding it in trust for the State; the money belongs to Connecticut. Failing to collect or remit Sales Tax can lead to civil liability, penalties, fines and even criminal charges.
Employment & Payroll Taxes
If your business has employees you will also need to set up your employment tax I.D.’s for both payroll and managing withholding taxes.
Payroll taxes are those that the employer matches based on what his employees pay in income tax. Managing Withholding Tax is the amount of the employees income tax that the business withholds from each paycheck and then sends to the government.
If you improperly classify an employee as an independent contractor, you could be held liable for all unpaid employment taxes.
Payroll tax and Withholdings are also held in “trust” for the State of Connecticut and can come with civil and criminal penalties.
Options for Business Tax Debt Resolution
These will vary depending on type and amount of business tax liability.
If you do not agree with a CT DRS or City/Town determination of your business tax liability, you may be able to appeal their determination. Our business tax attorneys can help you file an appeal and work through the appeals process.
If you owe unpaid business taxes, whether due to a mistake or an unfiled tax return, it can be beneficial to offer a settlement so you can avoid penalties and criminal investigation.
Offers in Compromise
An offer in compromise is an agreement with the DRS to pay less than the amount owed. We can help you negotiate an offer in compromise so you can meet your obligations within your ability to pay.
It may impossible for you to pay your back business taxes all at once. In these situations, we may be able to work out a payment plan with the DRS on your behalf.
We can help with the organization and preparation that is essential in a tax audit. If you have received a notice of audit or if you are involved in an audit with any tax authority, the attorneys at our firm can advise and guide you through the entire audit process.
Criminal Tax Defense
On rare occasion there is the risk of actual criminal consequences for one of our business tax clients. Our business tax attorneys are prepared to take the necessary steps to defend against criminal exposure for our business tax clients.