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Tax Controversy and Litigation
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I’m an officer of a company that hasn’t paid its Maryland withholding or sales tax. Can I be held personally liable for the unpaid amounts?

Yes.  Personal liability for state income tax required to be withheld from a Maryland employee’s wages extends to any officer, agent or person who exercises direct control over the fiscal management of the employer, or is required to withhold and pay the income tax.

Personal liability for unpaid sales and use tax extends, in the case of corporations, to the president, vice president, and treasurer, as well as any officer who directly or indirectly owns more than 20% of the stock.  This is strict liability – there is no willfulness requirement. With limited liability companies, personal liability extends to all members unless there is an operating agreement, under which liability is limited to individuals that manage the business and affairs of the company.

Individuals should consider the exposure that comes with officer positions and memberships in LLCs, and those in such positions should closely monitor their company’s tax compliance.

Rosenberg Martin Greenberg

25 South Charles Street, 21st Floor MD 21201
Phone: 410-727-6600
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Rosenberg Martin Greenberg

705 Melvin Avenue Annapolis, MD 21401
Phone: 410-727-6600
Map & Directions