Nonpayment of State Sales Taxes
The Arkansas Department of Finance and Administration (DFA) has padlocked and hung a very ugly sign on the gates of a waterpark located in North Little Rock for nonpayment of sales taxes. Allegedly, the waterpark failed to submit state sales taxes collected for one quarter of 2004. Many Arkansans have already purchased season tickets for 2005 season at the waterpark. The future status of the waterpark is unknown at this date.
DFA announced that there were also several dozen other small businesses that could be forced to cease business operations if taxes were not paid or a payment plan not negotiated within 5 days of receipt of a DFA letter to cease all business operations.
Folks, not paying your taxes, particularly after having collected them, is a definite way to kill your small business. Being someone who is inside the “industry” so to speak, I cannot tell you how many times I have heard of businesses not paying their taxes.
For those of you starting a small business, you should give strong consideration to depositing your taxes into a separate account so that you will not accidentally spend the funds on inventory, payroll, or any other non-tax cost. That money is not yours and spending it will cause you more grief than you know.
By the way, even if you have no sales because you’re still preparing to open,once you have that magic retail sales tax permit from DFA you must begin filing and filing on time. I know of a new businesswoman who once received a $6,000 bill from DFA even though she had no sales that month. It seems when you neglect to file, DFA bills you for the average amount paid by other businesses in your SIC classification. She was planning to sell fine jewelry, so she got a bill for the average monthly sales that a jewelry store in Arkansas would typically make. Talk about panic. She was never again remiss in filing her DFA paperwork!
