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Richard - Bizlaw
Richard - Bizlaw, Attorney
Category: Business Law
Satisfied Customers: 10629
Experience:  30 years of corporate, litigation and international law
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I registered with the state of Indiana for a sellers permit

Customer Question

I registered with the state of Indiana for a sellers permit and to remit sales tax because of their aggressive nexus requirements. I have no physical presence in the state, but some of my inventory does visit a warehouse in that state for packing and shipping (supposedly qualifying me for nexus). I am solely based in California.They require sales tax returns to be filed online, but their online system doesn't work. After numerous phone calls, attempts to get a verification code to work, attempts to get help from their technical support team and so on, it still won't active an online account for me. I filed a paper return (they relented and mailed one) for 2015. For 2016, they won't respond to my request for a paper return or technical help so I cannot file a return.They did not respond.Instead, they sent a collection letter for an absurd amount (about $700), which is nearly the amount of total gross sales in that state. I only owed about $40 in sales tax and I mailed the Dept of Revenue a check, which they CASHED. I also mailed a certified letter documenting the attempts to file and the lack of response and technical resolution.They did not respond.Recently, they sent another letter stating that I still owed about $700, which is patently false. A collection agency sent me a letter about this debt as well. They also sent a letter that said my sellers permit would not be renewed if I didn't pay this amount, which I do not owe.A agent called me and left a message about this "debt" they claim I have and asked for a call. I called, left a message, referenced the case number ***** how I paid the debt. They did not return my call.I'm rather lost at what to do next. Who can I report this to? Is there a federal agency that investigates extortion by a state agency?Should I attempt to close my business in that state? (They threaten to refuse the application if their required documentation is not submitted -- documentation that simply does not exist for a sole proprieter small business selling goods online.) I have formed an LLC since the initial sales tax/seller permit registration so the sole proprieter business is indeed closed.Is there another remedy to this situation where they do not respond to phone calls, emails, faxes and certified letters?
Submitted: 7 months ago.
Category: Business Law
Expert:  Richard - Bizlaw replied 7 months ago.

Hello, my name is ***** ***** I will try to help you. Please remember I just report or interpret the law, so the outcome may not be what you hoped for.

I am sorry to hear about your predicament. If you paid the taxes due but did not file a return, copy your 2015 return, white out the entries and enter the appropriate amounts for 2016. Mark that as your 2016 return and mail it in by regular and certified mail r/r/r. Now you have filed the return and paid what is due. If they sign for the certified letter with the return you have proof of receipt. If they do not accept the certified letter but the return sent by regular mail is not returned, you have evidence that you submitted the return. That will now serve as a basis for providing the collection agency with proof that there is no debt and if they persist you can sue them for unfair debt collection practices.

The state agency may never respond but you will have all the evidence you need to prevent them from causing you any further hassle. Finally, there is no federal agency to help you with this problem.

If I have answered all your questions, please highly rate my answer as that is how I receive credit. If you have more questions, please let me know. If the answer was especially helpful you can provide a bonus.

Customer: replied 6 months ago.
Hi Richard,
Thanks for your suggestion. Indiana states that all sales tax returns must be filed electronically, so they may reject a paper form. They removed the paper form from the website and even though I've requested a paper form multiple times, they ignore all of my correspondence. I did find an old copy of a paper return and mailed it as you suggested.However, they have sent yet another letter claiming I owe over $700 in sales tax, despite the fact that they cashed my check for the appropriate amount of sales tax. They have been provided with evidence that my sales are only about $1000 in that state so this is clearly impossible. They've threatened to cancel my sellers permit and claim I will be committing a misdemeanor by selling. (By the way, I do not have any true physical presence in that state, I only used a warehouse for shipping that was located in that state. I am going to cease using that warehouse.)How can I report them for false debt collection? What should I do if they refuse to accept the paper return and refuse to fix their online system and thus I can never file?