State Back Taxes

In addition to any back taxes you owe to the IRS, you may also owe back taxes to one or more states, cities, or other municipalities. Because of these complexities in the tax laws, it is a good idea to hire a tax specialist who is familiar with the relevant tax code in your state.

Back taxes owed to the state are a serious negative item on your credit report, just like unpaid federal back taxes, so it is a good idea to contact the state as soon as possible and arrange to pay off the back taxes so you can move on.

Sometimes a back taxes situation is created when new tax laws are put in effect, or tax payers misunderstand tax law. For example, the sales and use tax rates in California vary by county. If a business implements a point of sale and inventory reporting system that is not properly updated with county tax rates, there could be a startling difference between the amount of sales and use tax you are collecting versus the amount of tax you are paying in turn to the state.

Some states are empowered to accept less than the full amount of back taxes in cases where you can show that you are unable to pay the full amount.


Links to State Government and State Tax Authority Websites


 
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Information provided about back taxes is intended for educational purposes. The content of this site is not intended to be a substitute for professional tax advice rendered by a CPA, attorney, or an Enrolled Agent.