Laws, Regulations & Annotations
Business Taxes Law Guide – Revision 2013
Sales and Use Tax Annotations
170.0000 COLLECTION OF TAX BY BOARD
(b) LIABILITY OF CORPORATE OFFICER
170.1235 Corporate Officer Liable for Corporation's Tax Liability. The president of a corporation was prosecuted in Municipal Court for violation of section 7153 in that he, as president of a corporation, engaged in business without obtaining the required seller's permit from the Board and failed to file the required sales tax returns. After conviction, the president was required, as a condition of probation, to pay restitution to the Board in the form of taxes due by the corporation. The corporation subsequently filed Chapter 7 bankruptcy.
As a corporation, 11 U.S.C. section 727(a) prohibits it from obtaining a bankruptcy discharge of its liability to the Board in a Chapter 7 proceeding. Only individuals are discharged in bankruptcy. Therefore, the court's order requiring the president to pay restitution to the Board in the form of taxes due from the corporation was proper as the corporation's tax liability was not discharged. 8/19/96.