An individual can be liable for tax debts a business owes to the Minnesota Department of Revenue. When a business fails to pay their debt, the department sends an Order Assessing Personal Liability letter. The letter notifies individuals they are personally responsible to pay the business’s debts and describes their appeal rights
. View the statutes (Minnesota Statutes, section 270C.56
, M.S. 289A.31
and M.S. 290.92
Who can be assessed?
The department must assess personal liability before taking enforced collection action
against those personally liable. The department may assess personal liability to a business’:
- Officers and Directors.
- Treasurers and financial secretaries.
- Accountants and bookkeepers.
- Supervisors and other employees who:
- Have authority to write checks for the business.
- Have the authority to decide whether to file tax returns and pay debts.
- Hire and fire employees.
- Control the business’ financials.
- Have an entrepreneurial stake in the business.
The officer of a sole proprietorship
, or individual spouses in a qualified joint venture, are not assessed as they are already liable for the debts of the business. However, officers of corporations, limited liability companies, cooperatives, estate and trust and organizations whether profit or non-profit must be assessed. General partners of a partnership are jointly liable for the minimum fee.
Once assessed, an individual has 60 days to appeal either to the department directly or to the Minnesota Tax Court
. If appealing to the department, a written request may be submitted requesting an additional 30 days to appeal. Information regarding the appeal process is included in the letter.
If the appeal to the department is denied, the individual assessed has 60 days from the date of the denial to appeal the decision in Tax Court. Enforced collection action is not taken during the appeal period
What taxes are subject to personal liability?
The department may assess personal liability for the following:
- Cigarette and Tobacco tax.
- Gambling tax.
- Liquor tax.
- MinnesotaCare tax (from 1996 on).
- Petroleum tax.
- Sales and use tax.
- Withholding tax and Non-Resident withholding tax against shareholders.
- Solid waste management tax.
- Tobacco Health Impact fees.
The following are not subject to personal liability:
- Corporate franchise (income) tax.
- Partnership income tax.
- MinnesotaCare taxes (from 1995 and earlier).
- Other agency debts.