Responsible Person Assessments against Members of NY Limited Liability Companies for Sales TaxNew York City and State Tax Controversies

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If a limited liability company (LLC) in New York State owes sales tax to the State, the State Tax Department may assess ANY MEMBER OF THE LLC to be a “responsible person”.

“Responsible” means the same as “liable” in this context. In the case of an LLC, each and every member is 100 percent PERSONALLY responsible for the company’s State sales tax liability. This means that the State can go after the PERSONAL assets of ANY member of the LLC, regardless of that individual’s day-to-day involvement with the business. If you are part of an LLC, this could be devastating to you and your family.

There is possible relief, under Technical Memorandum TSB-M-11(6)S which was issued by the New York State Department of Taxation and Finance in 2011. Certain criteria must be met by the individual seeking relief, and the policy does not absolve him or her from paying anything at all.

If you find yourself faced with this situation, the best thing to do is to contact a qualified tax attorney like the ones here at Bailyn Law. We will cut through the complexity and resolve this situation for you efficiently and with a minimum of stress.

Fill out the form below or call us at 646-326-9971 for a free in-office consultation.

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Bradley R. Bailyn, Esq. , Founder

Bailyn Law provides comprehensive legal and advisory services to closely held and family businesses seeking to capitalize on opportunities, avoid or mitigate risks and create long-term stability through good management and diligent business decisions. We help owners and directors structure successful transactions to improve profitability and liquidity including purchasing and selling entire companies or certain assets, restructuring the ownership, management and operations of the business, raising capital or entering joint venture agreements. We serve as general counsel for our clients, fulfilling daily needs and building long-term relationships of trust and confidence.

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