Mississippi Sales Tax Nonpayment Risk Checklist
Sales tax nonpayment in Mississippi occurs when a business or sales tax permit holder fails to pay sales tax that was collected from customers or owed to the state. This differs from failing to file a sales tax return because a return may be filed on time, showing the amount owed, but the actual tax payment was not made by the deadline.
The Mississippi Department of Revenue treats unpaid sales tax seriously because those funds belong to the state. When sales tax goes unpaid, the state begins a collection process that can include penalties, interest charges, liens, and enforcement action.
What This Issue Means
When the state identifies sales tax nonpayment, a tax liability exists and has not been paid by the required deadline. Nonpayment is tracked separately from late filing and triggers the collection process rather than the filing compliance process.
Why the State Issued This or Requires This
Businesses collect sales tax in Mississippi on behalf of the state. If a business collects sales tax from customers but fails to remit it, the state loses revenue and initiates collection activity.
Collection actions begin automatically once a payment deadline passes without full payment.
The Mississippi Department of Revenue monitors filed returns and compares reported liabilities with payments received.
What Happens If This Is Ignored
Ignoring nonpayment leads the state to send additional notices requesting payment. These notices include updated amounts showing accumulated penalties and interest charges.
The state may place a tax lien against the business or individual taxpayer if payment is still not received. A lien is a legal claim on assets that can affect credit, borrowing ability, and business operations, potentially leading to asset seizure or the state’s ability to garnish wages.
What This Does NOT Mean
Mississippi sales tax nonpayment consequences do not automatically mean criminal charges will be filed against the taxpayer. Nonpayment does not automatically result in business closure, though collection actions can affect operations.
Checklist: What to Do After Receiving This or Identifying
This Issue
Step 1: Gather all sales tax documentation
Locate your sales tax return copies, payment receipts, and bank statements showing any payments made to Mississippi. This documentation helps you understand what was reported versus what was paid and confirms the tax liability balance.
Step 2: Verify the amount owed
Contact the Mississippi Department of Revenue at (601) 923-7700 to request a current account
statement. This statement shows the original amount due, any penalties and interest charges added, and the total current balance.
Step 3: Confirm the filing and payment deadlines that were missed
Determine which sales tax periods the nonpayment applies to. Mississippi requires sales tax payment by the 20th day of the month following the reporting period for all businesses.
Step 4: Check for any liens or enforcement actions already filed
Ask the Mississippi Department of Revenue whether a tax lien has been filed against you or your business. A lien is a public record, and you should know if one exists to prevent asset seizure.
Step 5: Determine if penalties and interest can be explained
Review the notice or account statement to understand which penalties were added. The
Mississippi sales tax penalty and interest rate are established by law: interest charges accrue at one-half of one percent (0.5%) per month from the original due date, and a ten percent (10%)
penalty may be assessed for persistent, willful, or recurring failure to pay.
Step 6: Decide on a payment approach
Determine whether you can pay the full amount owed immediately or whether a payment plan would be necessary. The state's collection section can discuss available options for resolving your business tax obligations.
Step 7: Contact the Mississippi Department of Revenue collection section
Reach out to the collection division to discuss your account. Provide the account number or business identification number when discussing your business tax situation.
- Missing follow-up deadlines can trigger additional enforcement action. Write down all
- Making partial payments without confirming the current total due can leave outstanding
- Ignoring a tax lien or enforcement notice does not make it go away. Respond to the state
- Providing incomplete information to the department when asked for documentation may
- Assuming the debt will expire is incorrect because Mississippi has a 36-month statute of
- State enforcement actions and notices
- Payroll tax debt review and resolution
- Penalty and interest reduction options
- Payment plans and compliance solutions
- Representation before state tax agencies
Step 8: Request written confirmation of your account status
After speaking with the department, ask for written confirmation of the current balance, any liens or actions pending, and any agreements discussed. Written documentation protects both you and the state and ensures clarity moving forward.
What Happens After This Is Completed
After you complete these steps and contact the Mississippi Department of Revenue, the state reviews your account and may respond with collection options. The department applies any payment you make to your account and issues a receipt showing the tax paid amounts.
A tax lien enrolled as a judgment remains in effect for seven years from the date of filing and may be refiled indefinitely in seven-year increments. Follow-up notices may arrive if payments are late or if the account remains inactive.
Common Mistakes to Avoid deadlines provided by the state and confirm receipt of all notices. balances that trigger continued collection efforts and additional interest charges. Always confirm the current amount before making a payment. within the timeframe specified in the notice to avoid asset seizure. delay resolution. Keep copies of everything you send to the state regarding your business tax account. limitations for assessing sales tax, but once assessed, collection can continue indefinitely through liens. Payment or an official agreement with the state is the only way to resolve the debt.
Frequently Asked Questions
Does nonpayment mean I did not file my sales tax return?
No, nonpayment is separate from filing. A sales tax return can be filed on time, showing the amount owed, but the payment can be missed.
Can the state charge me interest on unpaid sales tax?
Yes, interest charges accrue at one-half of one percent (0.5%) per month from the original due date until the tax is paid.
What is a tax lien, and how does it affect me?
A tax lien is a legal claim against your property or business assets. It becomes a public record and can affect your credit, ability to borrow money, and ability to sell property.
Can I request a payment plan from Mississippi for unpaid sales tax?
The Mississippi Department of Revenue may work with taxpayers to establish payment arrangements. Contact the collection section to discuss options for managing your tax liability and avoiding continued interest charges.
How long can the state pursue the collection of unpaid sales tax?
Mississippi has a 36-month statute of limitations for assessing sales tax from the date the sales tax return was filed. Once assessed, collection can continue indefinitely through liens that can be refiled every seven years.
Will paying the debt remove a tax lien from my record?
Once the debt is paid in full, the lien can be released. The state files a lien release, which removes the claim from public records and confirms all taxes paid.
What to Do Now
The Mississippi Department of Revenue collection process requires prompt attention and communication. Understanding what you owe, confirming the current balance, and contacting the state collection section are the first steps toward resolution.
Facing State Enforcement or Payroll Tax Issues?
If you’ve received a state tax notice and aren’t sure how to respond, we can help you review your options and next steps.
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