Deadco was a corporation engaged in manufacturing of countertops at two locations in PA. During 2011, the corporation defaulted on its debts and its primary creditor initiated foreclosure proceedings. In 2012, 100% of the assets of the company were sold at auction. Proceeds of the sale were used to pay-down corporate debts, but they were insufficient to completely pay off all of the company’s indebtedness. The company thereafter completely liquidated. In 2013, the Department of Revenue conducted an audit of Deadco and determined that the company had a use tax deficiency of $15,000. Q:
Since there are no corporate assets which the Commonwealth can levy to pay the use tax deficiency, can the Commonwealth attempt to collect the use tax deficiency from Deadco’s former officers? A:
From an enforcement perspective, the former officers cannot be assessed for the use tax deficiency as responsible party assessments may only be issued for trust fund taxes (including sales & employer withholding taxes) collected but not remitted to the Department. In the scenario described, the use tax was Deadco’s responsibility to pay, therefore the Department may not enforce the use tax liability against the former officers of Deadco.