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Dealing with a sales tax controversy

| Mar 24, 2016 | sales tax

Income taxes are not the only form of tax that Maryland businesses owe the government. They must also pay sales tax, and if tax authorities accuse your business of under-reporting sales tax, it could mean a great deal of trouble.

Few businesses deliberately misrepresent their sales taxes. Often, the tax controversy is the result of sloppy business practices, like failing to withhold or remit payments in a timely or proper manner. Poor record keeping can be to blame. Even after you fix these problems, authorities may go after prior alleged shortfalls.

At the same time, even if the government accuses your business of owing a tax liability, the bill may be too high. Instead of carefully totaling up the alleged liability, the government estimates the bill using ratios. This is why it’s so important to pay close attention to what the government is accusing you of.

For many states, recovering under-reported sales tax is a way of trying to make up for budget deficits. So they can be aggressive about going after businesses, especially service providers, retail stores and government contractors.

Fortunately, small businesses do not need to face state tax authorities on their own, without the legal and negotiating expertise of a tax attorney on their side. No matter the circumstances of your case, an experienced lawyer can protect you from exaggerated tax assessments and unjust penalties and fines. Meanwhile, he or she will help resolve the dispute, so you can concentrate on your business hopes and dreams instead.