Laws, Regulations & Annotations
Business Taxes Law Guide – Revision 2013
Sales and Use Tax Annotations
170.0000 COLLECTION OF TAX BY BOARD
(a) IN GENERAL
170.0007.001 Discharge in Bankruptcy. A taxpayer purchased a vessel in either June or July 1986 and a Sales and Use Tax return was not mailed to the taxpayer. Therefore, the use tax was due on or before the last day of the twelfth month following the month during which the vessel was purchased, either June 30 or July 31, 1987, depending on the month of purchase. The taxpayer filed for bankruptcy on November 4, 1991, and was subsequently discharged in bankruptcy on January 30, 1995.
Since the taxpayer did not file a return prior to his bankruptcy filing date of November 4, 1991, this use tax liability cannot be discharged pursuant to U.S.C. section 507(a)(7)(E) because of the exception to that discharge provided by 11 U.S.C. section 523(a)(1)(B)(i). Any post-petition return filed would have constituted a post-petition liability similarly excepted from discharge in a Chapter 7 bankruptcy.
Also, the taxpayer did not list or schedule the Board as a creditor in his bankruptcy petition. The failure of the taxpayer to list or schedule the Board as a creditor in his bankruptcy petition also excepts the liability from discharge pursuant to 11 U.S.C. section 523(a)(3). Therefore, the Board may issue a Notice of Determination against the taxpayer for the use tax on the purchase price of the vessel. 7/31/95.