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BAEC lecture stressed State efforts to enforce Sales Tax Compliance

Posted: June 25, 2010

Buffalo, NY – More than 50 attorneys, CPA’s and high level government officials recently learned about New York State’s efforts to enforce payment of state sales taxes at a lecture held at the Bar Association of Erie County (BAEC) Headquarters. The lecture, which qualified for Continuing Education Credits for attorneys was sponsored by BAEC’s Bankruptcy and Commercial Law Committee.

Jeffrey Freedman, senior partner, Jeffrey Freedman Attorneys at Law, helped organize the lecture and introduced the two speakers William J. Comiskey, Esq., Deputy Commissioner for Enforcement, NYS Department of Taxation and Finance; and Michael T. Kelly, Esq., a former prosecutor who is now in private practice and has defended clients in several cases with the NYS Tax Department. Freedman also moderated the question and answer period.

Comiskey spoke about widespread under reporting of sales tax by business and the need for all businesses to be accurate in reporting sales tax and to pay what they legally owe. He said it is only fair to honest tax-paying citizens to pay appropriate sales taxes, and that compliance with payment of sales tax will help close the budget gap. When businesses underpay, legislators must respond by raising tax rates.

Comiskey said the state has been investigating sales tax reporting by sending agents undercover rather than solely by auditing businesses, and it has found that large businesses as well as “mom and pop” shops routinely under report sales tax.

Comiskey and Kelly both said 90 percent of vendors do not keep the accurate records required by auditors. Retail businesses should keep records of every sale; amounts paid, charged, and the amount of tax payable for the sale. Kelly cautioned that saving only receipts and bank deposits can result in the state estimating sales tax due and coming up with an inaccurate figure because the method used doesn’t take into account sales or specials.

Business people must remember they are fiduciaries of sales tax revenues, Comiskey said. They should collect the funds and treat them as though the sales tax dollars belong to someone else -- because they do. They belong to the state.

Click Here to view some photos from the event.

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