Florida Sales Tax Nonpayment Risk Checklist
Sales tax nonpayment in Florida occurs when a business collects sales tax from customers but fails to remit it to the Department of Revenue by the due date. This is one of the most serious tax compliance issues because the money collected belongs to the state, not the business. Unlike income tax, which is based on profit calculations, sales tax is a pass-through obligation: businesses act as collection agents for the state.
When nonpayment happens, the state typically escalates enforcement action quickly because unpaid sales tax represents direct revenue loss. Ignoring nonpayment notices or continuing nonpayment can result in tax penalties, interest charges, liens, license suspensions, and potential criminal prosecution. Understanding what sales tax nonpayment entails and recognizing early warning signs can help prevent it from worsening.
This checklist explains the typical process, what actions the state takes, and what steps to take if you are facing this issue. Following this guidance can help avoid serious consequences, including criminal charges related to sales tax crimes or tax fraud.
What This Issue Means
Sales tax nonpayment means that a business collected sales tax from customers during a reporting period but did not send the full amount owed to the Florida Department of
Revenue by the tax return due date. The business may have filed a return showing the tax owed, failed to file a return entirely, or filed a return but did not include payment.
This is different from owing sales tax based on unreported sales.
Nonpayment typically refers to a situation where tax liabilities exist (either reported or discovered by the state), but the payment was not received by the state's deadline. The state has a clear record of what is owed and when payment was due. Sales tax obligations are governed by Chapter 212 of the Florida Statutes, which outlines collection requirements and enforcement mechanisms.
Why the State Issued This or Requires This
The Florida Department of Revenue monitors sales tax payments against filed returns and payment records. When a payment is not received by the due date, or when the amount received does not match the amount reported on the return, the state's computer systems flag the account for nonpayment. Businesses are required to remit sales tax because they collect it on behalf of the state.
The state treats this as a debt that must be paid by a specific deadline, just like any other obligation. When the state identifies nonpayment, it initiates collection efforts to recover the unpaid amount, along with applicable penalties and interest. The state may issue a notice to inform the business of the unpaid balance, the penalty being applied, and the deadline for payment or response.
What Happens If This Is Ignored
If delinquent sales tax is ignored and no action is taken, the state typically escalates collection efforts. The unpaid balance accrues interest at a daily rate, and tax penalties are applied in accordance with state law. Florida uses a floating interest rate that is updated twice a year on January 1 and July 1.
Follow-up notices are usually sent, and the account may be referred to the state's collection division. If the debt remains unpaid for 90 days, the Department will charge a
10% administrative collection processing fee to cover the costs of collecting the debt.
This is separate from the initial late filing penalty of 10% of the tax owed, with a minimum of $50.
If nonpayment continues, the state may file a tax lien against the business, which affects credit and the ability to secure financing. The state may also suspend the business's sales tax permit or other licenses, effectively preventing it from legally operating. In cases of substantial or repeated nonpayment, the state may pursue criminal prosecution, though this is typically reserved for cases involving fraud penalty assessments or intentional tax evasion.
What This Does NOT Mean
Nonpayment of sales tax does not mean the business is immediately shut down or that criminal charges have been filed. It does not mean all business licenses are automatically revoked, though the sales tax permit may be at risk. Nonpayment also does not mean the state has seized assets or filed a lawsuit yet, though these actions may follow if the debt remains unpaid.
Receiving a nonpayment notice does not mean the state has rejected an offer to settle or that payment arrangements are unavailable. It also does not mean the penalty amount shown is final and unchangeable in all circumstances. The Department of
Revenue considers reasonable cause defenses and may review penalties based on documented circumstances.
Checklist: What to Do After Receiving This or Identifying
This Issue
Follow these steps in order
1. Locate and review the official notice from the Florida Department of Revenue
Identify the specific reporting period, the amount owed, the penalty applied, the due date for payment or response, and any case or notice number.
2. Verify the business's sales tax account status by logging into the Florida
Department of Revenue Online Services portal or contacting Taxpayer
Assistance at (850) 488-6800 Monday through Friday, 8:00 a.m. to 5:00 p.m.
Eastern Time, excluding holidays.
3. Gather all business records for the reporting period in question: Include cash register records, sales receipts, purchase receipts, payment records, and bank statements showing what was collected and when.
4. Determine whether the tax return was filed: Check records to confirm whether a sales tax return was submitted for the period shown in the notice and whether payment was included with that return.
5. Review your point-of-sale systems to verify tax calculations: compare the amount shown on the state's notice with the business's records to confirm accuracy or identify any discrepancies.
6. Check for any payments that may have been sent but not yet processed
Verify payment posting dates through your bank records and the Department of Revenue's online system, including payments made through electronic means or registered mail.
7. Document any extenuating circumstances that prevented timely filing or payment, such as a system error, business closure, or other documented events that establish reasonable cause.
8. Calculate the total amount now owed, including the original tax, any penalties, and accrued interest as of the current date: Interest is calculated using a daily interest rate factor based on Florida's floating interest rate.
9. Contact the Florida Department of Revenue before the notice deadline to discuss the nonpayment and ask about next steps, including whether the penalty can be reviewed or adjusted under reasonable cause provisions.
10. Determine the business's current financial situation: Assess whether immediate full payment is possible or whether a payment arrangement is necessary.
11. Research payment options available through the Department of Revenue, including payment plans, electronic payments, and other methods the state accepts for resolving delinquent taxes.
12. Consider consulting with tax attorneys or certified public accountants if the case involves complex issues: Professional guidance can help navigate revenue laws and ensure proper compliance.
13. Prepare a written response to the notice, if requested, or if the deadline to respond has not passed. Include all supporting documentation and reference the case number.
14. Submit any response, request for review, or payment by the deadline shown in the notice: Use the address or method specified in the notice to ensure proper processing.
15. Keep copies of all correspondence, payment confirmations, and receipts for future reference and record-keeping: Maintain an organized accounting system for all tax-related documents.
16. Monitor the account status regularly through the Department of Revenue
Online Services to confirm that payments are being properly credited and the account balance is decreasing.
What Happens After This Is Completed
After the business responds to the notice or makes a payment, the Department of
Revenue typically processes the response or payment within a designated timeframe. If a payment is made, the state applies it to the outstanding balance and issues a confirmation. If a response is submitted requesting a review or penalty consideration, the department will evaluate the request in accordance with state guidelines.
The state may issue an additional notice reflecting the updated balance, or the account may be closed if the debt is paid in full. If a payment arrangement is requested, the state issues terms for the payment plan, and the account is monitored to ensure payments are made on schedule. If the nonpayment involved a serious compliance issue, the state may initiate a tax compliance review or additional audits.
Common Mistakes to Avoid
- Businesses dealing with nonpayment of Florida sales tax often make errors that
worsen the situation. Ignoring the notice or missing the deadline to respond typically results in more aggressive collection action. Assuming the debt will go away or that the state will forget about it prolongs the issue and increases penalties and interest.
- Failing to file amended returns when sales figures were incorrect leaves the
wrong amount on record. Not keeping detailed payment records from your cash register or merchant processing system makes it difficult to prove that a payment was sent or to dispute the amount owed. Sending payment without a clear note or case number can result in the fee being misapplied or not credited to the correct account.
- Missing deadlines for responding to notices, making agreed-upon payments, or
providing requested documentation can result in enforcement escalation. Not communicating with the state about financial hardship or inability to pay immediately may prevent the business from learning about available options.
Continuing to operate without resolving the nonpayment issue puts the company at risk of permit suspension or other enforcement action.
- Businesses should also avoid confusing sales tax obligations with other types of
taxes, such as property taxes, payroll taxes, or local taxes collected by the county tax collector. Each tax type has different compliance requirements and collection procedures. Sales tax falls explicitly under Chapter 212 and is administered by the Florida Department of Revenue, not local governments or the county tax collector in most cases.
Frequently Asked Questions
How long does the state have to assess and collect unpaid sales tax?
The Florida Department of Revenue has three years from the later of the tax due date, return due date, or return filing date to assess sales tax. For collection, sales tax liens expire 20 years after the last date the tax may be assessed, after the tax becomes
delinquent, or after the filing of a tax warrant, whichever is later. General tax liens without specific statutory enumeration expire after five years.
Can penalties be reduced or removed?
Tax penalties may be subject to review in certain circumstances, such as when the business can demonstrate reasonable cause for late payment. This differs from a negligence penalty, which applies when a taxpayer fails to exercise ordinary care.
Requests for penalty consideration must typically be submitted in writing within a specific timeframe. The department will evaluate the request based on the facts presented.
What is the difference between a notice and a lien?
A notice is a formal communication from the state identifying the debt and requesting payment or response. A lien is a legal claim against business or personal assets filed when the debt remains unpaid, and collection efforts have not resolved the issue. A notice typically comes before a lien, but a lien represents a more serious enforcement action.
Does sales tax nonpayment affect personal credit?
Sales tax nonpayment typically affects the business's tax account and credit, not personal credit, unless the company is structured as a sole proprietorship or the owner is personally liable for the debt. Whether individual liability applies depends on the business structure and state law. The state may file liens against real property or other assets if the debt remains unresolved.
Can a business make a partial payment?
The state typically accepts partial payments toward the outstanding balance. However, it is essential to contact the Department of Revenue to confirm that the partial payment will be credited appropriately and to understand what remains owed and when it is due.
What happens if the business cannot pay the full amount right now?
The Department of Revenue may offer payment plan options or other arrangements.
The business should contact the department to discuss its situation and ask about the options available, given its financial circumstances. Taxpayers requesting a payment agreement should be prepared to provide financial documents supporting their inability to pay the debt in full and to pay a minimum of 25% down, with the full balance paid within a year.
Can the business dispute the amount owed?
If the business believes the amount owed is incorrect, it can submit a written request for review or dispute along with supporting documentation. The request should be submitted within any deadline specified in the notice, or the business should contact the
Department of Revenue to learn how to challenge the amount formally. Complex disputes may benefit from consultation with tax attorneys or certified public accountants.
Does a payment plan stop penalties and interest from accruing?
Interest continues to accrue on the unpaid balance even after a payment plan is established, because it is calculated on the principal balance. Penalties may not accrue in the same way if a formal payment arrangement is in place, but this depends on the specific terms agreed to with the state.
What should the business do if it receives a notice of lien filing?
A lien notice means the state has filed a formal claim against assets. The business should contact the Department of Revenue immediately to discuss payment or resolution options, as a lien represents an escalated collection action that can affect financing, sale of the business, and personal assets if applicable.
Facing State Tax Enforcement Action?
If you’ve received a notice related to sales tax or payroll tax enforcement and are unsure how to respond, our team can help you understand your options and next steps.
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- State enforcement notices and responses
- Sales tax audits, assessments, and collections
- Payroll & trust fund tax enforcement issues
- Penalty and interest reduction options
- Payment plans and state tax relief eligibility
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