In addition to paying your employees the required minimum wage, a franchise owner has the legal responsibility to comply with the department of taxation, in the states where they are located, to pay sales taxes on an on-going basis. If a franchisee fails to pay sales tax and are caught, the business and the franchisee’s life could be quickly ruined. A case in point, is the recent felony complaint registered against an owner of three Subway sandwich shops and one Auntie Anneb s Pretzels, all located in Oswego County, New York.

According to a recent article written on http://www.cnybj.com/, 39-year old Andrew Buccilli, owner of Sofa King Fresh LLC, which serves as a holding company for the above-mentioned franchises faces, “one count of 2nd degree grand larceny, four counts of 2nd degree criminal tax fraud, 10 counts of 3rd degree criminal tax fraud, one count of 4th degree criminal tax fraud, and 15 counts of 1st degree offering a false instrument for filing.” The charges stem from failing to report sales tax on over $2,000,000 in sales amongst the franchises he owned, between the years 2010 and the present time. Mr. Bucilli faces up to 15 years in prison and civil penalties of double the amount of taxes owed.

From the first day you purchase a franchise, you need to consider hiring a franchise lawyer to advise you on properly collecting and paying sales taxes. Franchise attorney Mario L. Herman can advise a franchisee or a franchisor on issues of sales taxes. While this is a highly specialized area of practice and differs from state to state, we can help you put together a team of income tax lawyers and certified public accountants so that once you are in compliance with your state’s and federal sales tax laws, you’ll be free to concentrate on the formidable task of running and growing your business.

If you are having franchisee sales tax issues or need to get advice on how to collect and pay your state’s sales tax, give knowledgeable and experienced attorney Mario L. Herman a call today.