Current through Register Vol. XLI, No. 38, September 20, 2024
4a.1. If the taxpayer is an association or
corporation, the officers thereof shall be personally liable, jointly and
severally, for any default on the part of the association or corporation, and
payment of the consumers sales and service tax and any additions to tax,
penalties and interest thereon imposed by W. Va. Code '11-10-1 et
seq. may be enforced against them as against the association or corporation
which they represent.
4a.2. A
corporation, the officers of which are liable for payment of the tax, is any
corporation incorporated under the laws of this State, and any foreign
corporation authorized to do business in this State or doing business in this
State without such authorization.
4a.2.1. A
corporation whose charter has been forfeited by decree of court for nonpayment
of corporate charter license tax ceases to exist as a legal entity and has no
power to engage in business after such forfeiture. The tax liability of a
corporation incurred prior to such forfeiture is a debt of the corporation and
a liability of its officers. The tax liability incurred after such forfeiture
is not incurred by the corporation but by the individuals doing business, and
such liability may be assessed against and collected from the individuals,
directly and not as officers of the corporation, even if the charter of the
corporation is subsequently reinstated.
4a.3. An association is any two or more
persons who have voluntarily joined together to transact or engage in business
activity, and who are not a corporation or partnership, whether or not the
association is authorized or qualified to do business in this State and whether
for profit or not for profit. An association includes but is not limited to any
business, charitable, fraternal, beneficial, historic, veterans, or labor
organization, society, foundation, federation, lodge, club or order, or any
subordinate association or auxiliary thereof, that is not
incorporated.
4a.4. There is a
default by the corporation or association resulting in officer liability when:
(a) the tax is shown on a tax return and the
corporation or association neglects or fails to pay the tax within 15 days
after notice and demand for payment;
(b) the liability of the corporation is
determined by an assessment and such assessment is final and not subject to
administrative or judicial review and the corporation neglects or fails to pay
the tax within 15 days after notice and demand for payment; or
(c) when an assessment has not been made
against the corporation or association and the corporation or association has
not filed any return at the time required by law and has failed to file such
return after notice of such failure.
4a.4.1. A default occurs whether or not a
notice of tax lien has been filed against the corporation or association and
whether or not the State has attempted to collect or failed to collect the tax
from the corporation or association, and whether or not the corporation or
association is defunct, dissolved, or insolvent.
4a.4.2. The filing of a petition in
bankruptcy by a corporation does not stay or preclude the assessment of
officers of the corporation, since the tax is not dischargeable in
bankruptcy.
4a.5. The
officers of a corporation or association that are personally liable for
consumer sales tax include any president, vice-president, secretary, or
treasurer, and any other officers provided in the charter or by-laws of the
corporation or association, and any person who is elected or appointed to any
position with the authority of an officer, and who performs duties or
responsibilities in the management of the corporation. The officers of an
association include all members of its governing board and its trustees. A
person such as an incorporator, shareholder, member or employee of a
corporation or association is not considered to be an officer subject to
personal liability.
4a.5.1. A person who acts
as an officer or assumes the character, duties or responsibilities of an
officer, is presumed to be an officer, and such person cannot avoid personal
liability by alleging he was not properly elected. A person who is elected or
appointed as an officer without his knowledge or consent, or who does not act
as an officer and does not assume the character, duties, or responsibilities of
an officer, is not liable as an officer.
4a.5.2. An officer may be liable whether or
not the officer was under a duty to pay the tax or was responsible for the
payment of the tax, for or on behalf of the corporation or association, and
whether or not the officer acted willfully, or with the intent to evade the tax
or payment thereof.
4a.5.3. The
liability of a corporation, that is owned or controlled by a parent or other
corporation, may be imposed on an officer of the other corporation, if such
officer performs duties or responsibilities in the management of the taxpayer
corporation.
4a.6. An
officer is liable for the tax, interest, additions to tax, and penalties for
which the corporation or association is liable.
4a.6.1. An officer is liable for all amounts
which were required to be paid or which became due and payable during the time
the person was an officer. An officer is also liable for all amounts which were
required to be paid or which became due and payable prior to the time the
person became an officer, if the officer had the ability and authority to pay
the amount due from the available unencumbered funds of the corporation or
association after such person became an officer.
4a.6.2. If the amount of tax due for the
corporation or association has been determined by tax returns or determined by
an assessment which was the subject of a petition for reassessment, the officer
shall be liable for such amount.
4a.6.3. The liability of officers of a
corporation or association is joint and several, so that more than one officer
may be liable for the entire amount of tax for the same period. The total
amount of tax collected from all officers shall not be greater than the total
liability of the corporation or association.
4a.6.4. In determining the consumer sales and
service tax liability of a corporation or association, the application of
payments or partial payments against the multiple tax debts may be in issue.
Any voluntary payment, made by or on behalf of the corporation, that the
taxpayer has directed to be applied in a particular manner should be applied in
the manner directed by the taxpayer, i.e., specific tax, period, interest, etc.
Any involuntary payment, when the taxpayer has no immediate control over the
source, such as would result from a levy or offset, and any voluntary payment
for which the taxpayer has not directed the application, may be applied in such
a manner as to attain the maximum benefit for the State.
EXAMPLE: A corporation owes $5,000 consumer sales tax and
$5,000 corporation net income tax. The corporation remits a check for $1,000
and does not direct that it be applied in a particular manner. The corporation
remits a second check for $3,000 and directs, on the check or in a letter, that
it be applied to consumers sales tax. A bank levy results in payment of $2,000.
The State may apply the $2,000 and $1,000 to the corporation net income tax,
and must apply the $3,000 to the consumer sales and service tax, and may assess
the officers for $2,000 consumer sales tax.
4a.7. The liability of an officer may be
determined or estimated and an assessment made against such officer or
officers. The assessment may include any liability of the corporation or
association for tax, interest, additions to tax, and penalties that is due and
payable, and any such liability that is not due and payable because the
corporation or association has not filed tax returns at the time required by
law.
4a.7.1. An assessment against officers is
considered to be a proceeding for the collection of the tax liability of the
corporation or association. If the liability of the corporation or association
is determined to be due by an assessment which has become final, an assessment
against an officer must be made within five years after the assessment against
the corporation or association has become final. If the liability of the
corporation is determined to be due by methods provided by law other than an
assessment, an assessment against an officer must be made within five years
after the date on which the corporation or association filed its annual return,
or if no annual return is required, five years after the latest periodical
return required to be filed in any year is filed.
