Blog Post

What are business taxes?

Business taxes are a class of taxes payable by the business only. The owner of the business cannot be made responsible for them. Taxes such as corporate income taxes or franchise taxes are business taxes.

What can happen if these taxes are overdue?

business-taxesIf you have closed the doors of your business, there may be no way for the tax authority to collect your business tax.

If you have an operating business such as a corporation or a multi-member LLC with assets, such as machinery and equipment, patents, accounts receivable or other assets, the corporate income tax or franchise tax could be said to “attach” to the assets. The overdue tax may then need to be paid.

Unlike past due payroll taxes, you may find the tax authority willing to work out a liberal (for you) payment plan.

On the other hand, if the business has closed its doors, and the assets have been sold, or none existed in the first place, you can write a letter to the IRS or to the income tax or franchise tax board of your state and tell them that the business has closed. You’ll still get bills, but there will be no way for the tax authority to collect.

Am I personally liable for business taxes?

Once again, whether or not you have personal liability for the business taxes depends on the facts, so each case could be different. Consult a specialist to find out what is true for your case.