Who is responsible for paying an S corp’s state tax?

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Who is responsible for paying an S corp’s state tax?

Here’s my deal. I took over 100% ownership of the corporation 14 months ago. I found out recently the minimum tax was not paid for 2009. Recently (last month) someone else took over 100% ownership of the corp and I did not pay the 2010 minimum state tax.  Liable is probably a better term than responsible. Is the previous owner liable for the 2009 tax? Am I liable for the 2010 tax since I owned the company during that time?Or is the new owner liable for all back taxes?

Asked on May 11, 2011 under Business Law, California

Answers:

M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

The CORPORATION is responsible for paying the tax.  Logically, a corporation is not human and can not act as such. So the corporate officers are then responsible.  Now, what does your purchase contract state?  How is it worded?  How is your sale agreement worded?  What does it say?  I think that you have a gripe and suit against the person that you bought it from and the person you sold it to has a gripe against you.  The agreements I am sure warrant that all taxes are upn to date and that there are no outstanding liabilities other than those disclosed.  I would try and straighten it out asap.  On both ends.  Good luck.


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