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Will try to apply for a sales and use tax certificate for a…

Will try to apply for...
Will try to apply for a sales and use tax certificate for a new dot.com business S corp or LLC not sure yet? Question is how do I avoid being denied the sales and use tax certificate due to the reason that I was an officer in a S corp that owes back taxes and dissolved by the state due to no reported taxes for more than 2 years
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8/24/2017
Lane
Lane, JD, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 14,677
Experience: Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986
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WHich state?

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Customer reply replied 11 months ago
NYS

Yep, they're atrocious.

...

Your best bet will be to choose a state for organization (meaning, form under the laws of their state) where you can use a registered agent as the incorporator, and keep the shareholder/member anonymous).

...

I know that Wyoming does this. Then have the registered agent apply for the sales tax certificate for the various states where YOU have nexus in the name of the LLC or corporation.

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Customer reply replied 11 months ago
What about in Puerto rico or Hawaii?????
Customer reply replied 11 months ago
Will that work?????
Customer reply replied 11 months ago
Can I just be an employee involved in the daily operation?????

First, you have to understand that each state has sales tax law. And each state will TRY to pierce the corporate veil. But if their bureaucracy simply see a sales tax certificate come in from a new entity, without your Social Security number or any other associated identifying info, they'll process it.

...

let me see which states protect anonymity (by the way, using a C-Corp is likely your best defense, as it's a truly separate taxable entity, as opposed to a pass-through

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Nevada and Wyoming, and even New Mexico come up first, when I do a WestLaw search

...

These states do not require the disclosure of the identities of the shareholders of a corporation, or members of a manager-managed LLC in the required corporate filings (public records). Usually, these “privacy” states only require that the directors (sometimes only 1) and officers of the corporation, or the managers of the LLC, be disclosed on the Articles of Incorporation (or Articles of Organization) and all annual reports.

...

Wyoming doesn't even require that.

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These states also are touted as having better statutory default laws that protect the personal assets of shareholders and LLC members from attack by corporate or LLC creditors.

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But just remember that each state's sales tax law is different. New York wants a NY resident as what's called the "responsible person," so (real world) what this means is that you're asking someone to put themselves at risk for you. Taxes better be paid or you're putting their PERSONAL assets at risk, in NY.

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Customer reply replied 11 months ago
I was S Corp officer and didn't have assets at risk.
Customer reply replied 11 months ago
Is this a new law in NYS or am I misunderstanding you?. Your saying someone has to personally be responsible for the s corp?

If you were the responsible person, in NY for sales tax law purpose, you did

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Customer reply replied 11 months ago
From my understanding I'm not personally liable for corporation failure as long as the officers actions were within the corporate veil.
Customer reply replied 11 months ago
I will appreciate this last answer.

There are two different issues here. (1) the fact that taxing authorities are sometimes able to pierce that veil through the coordination of state corporate law and state tax law, and (2) what's needed TO protect the corporate veil.

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The taxing authority, just because of it's sovereignty, will always carry more weight than a private creditor or lawsuit. When a state's tax law and corporate law give deference to tax law they win every time.

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But the way ANYONE will pierce that corporate veil is to use the age old common law doctrine of alter ego theory (you might want to Google that phrase), saying that the entity is just an alter ego of you, no real business purpose other than to escape your tax obligations or the obligations of another company for whom you were responsible party.

...

Ways that be used to show alter ego are co-mingling (taking money from the company before having the company satisfy it's obligations, and other commingling or personal and corporate assets.

...

Another is simply not following the corporate law (LLC law is a sub-part of state corporate law) of the state.

Lane
Lane, JD, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 14,677
Experience: Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986
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Customer reply replied 11 months ago
Understood, thanks for your time.
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