ME—Sales & Use Tax: Failure to Remit Tax Not Sufficient Grounds to Abate Tax Assessment

Maine: A taxpayer was properly subject to Maine sales tax on the sales of cakes for off-premises consumption because they unintentionally failed to collect and remit tax did not constitute a ground upon which the Board of Tax Appeals could cancel or decrease the assessed tax.                                                                                                                                                                                                                                                                                                                                                                                                                 In this matter, when the taxpayer began selling cakes, those food items were not subject to Maine sales tax. Still, later, the legislation was amended, removing cakes from the exemption for grocery staples. Upon audit, the Maine Revenue Services (MRS) determined that the taxpayer had not collected or remitted sales tax on its cakes sales. The taxpayer argued that its failure to collect the tax was unintentional and that it would have collected and remitted the tax had MRS notified it of the most recent change in the tax law.
The Board acknowledged that the taxpayer’s failure to collect and remit the assessed tax was not on purpose; however, that fact did not constitute a ground upon which it could provide the requested relief. Further, the Board denied the taxpayer’s request to reduce the interest contained in the assessment. Finally, the Board stated that although the taxpayer did not collect and remit sales tax as required by law because it was unaware of a change in the law, that circumstance did not change the fact that MRS was entitled to the time value of the tax from the date it was due. Therefore, the Board upheld the assessment and did not adjust or modify it.


About Davis Davis & Harmon LLC – Sales Tax Experts: Headquartered in Dallas, Texas, Davis Davis & Harmon LLC – Sales Tax Experts specializes in sales/use tax refund recovery and audit defense. Our team of consultants is comprised of former Big 4 sales tax consultants and state sales tax auditors. Each of our consultants has 15 to 20 years of experience, providing our clients with access to a highly specialized team of sales/use tax professionals. At Davis Davis & Harmon, LLC we are committed to maintaining the highest standards in our talent pool. We work hard to meet our clients’ needs by ensuring that you view our firm as an extension of your company and a member of your team.

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