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Keywords

liabilitytax lawcorporationcompliance
liabilitytax lawcorporation

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State v. Longstreet, 536 S.W.2d 185

Facts

James T. Longstreet, the Executive Vice-President of Ranch Roy-L Inc., was charged with failing to file sales tax returns for two quarters in 1973. The corporation, which he managed, was required to collect and remit sales taxes but failed to do so on time. Longstreet was aware of the filing deadlines and the amounts due, yet he did not file the returns until after an investigation by the Department of Revenue. The corporation eventually complied with the tax law, but Longstreet was held personally responsible for the failure to file timely returns.

Issue

Is a corporate officer, acting in a representative capacity, criminally liable for failing to file sales tax returns and remit taxes under the Sales Tax Act?

The determinative question is whether the managing officer of a corporation subject to the sales tax law, by virtue of the foregoing provisions, or by implication or statutory construction, is a ‘person’ within the meaning of the law; whether the duty to collect the tax, make the return and remit the tax falls upon James T. Longstreet individually and personally by virtue of his capacity as manager and officer responsible for collecting the tax, filing returns and remitting the tax, so as to make him criminally responsible for failure to comply with the statutory requirements, or whether the corporation alone is liable and the individual is to be exculpated.

Rule

Under the Sales Tax Act, a 'person' includes any individual or corporate officer responsible for the collection and remittance of sales taxes, and such individuals can be held criminally liable for violations of the Act.

Section 144.080 1. ‘Every person receiving any payment or consideration upon the sale of property or rendering of service, subject to the tax imposed by the provisions of sections 144.010 to 144.510 , is exercising the taxable privilege of selling the property or rendering the service at retail and is subject to the tax levied in section 144.020.'

Analysis

The court determined that Longstreet, as the managing agent of the corporation, was responsible for filing the sales tax returns and remitting the taxes. The court emphasized that the Sales Tax Act does not exempt corporate officers from liability simply because they act in a representative capacity. The court referenced statutory language indicating that both the corporation and its officers are liable for compliance with tax obligations.

On the merits we are of the opinion that James T. Longstreet, acting in a representative capacity as the managing agent of the corporation, charged with the official duty of filing the corporation's sales tax returns and paying sales taxes due by the corporation, is a ‘person’ within the meaning of s 144.080 1., and as such is criminally liable, after collecting the taxes, for failure to file the required returns on time and remit the taxes; and that he is not to be excused from criminal liability on the ground that he was acting in a representative capacity only and not in the conduct of his own personal, individual business.

Conclusion

The court affirmed Longstreet's conviction, concluding that he was criminally liable for the failure to file the required sales tax returns and remit the taxes due.

Judgments on both counts affirmed.

Who won?

The State prevailed in the case, as the court found that Longstreet, despite acting on behalf of the corporation, was personally responsible for the tax obligations under the Sales Tax Act.

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