A responsible person may be any officer or employee of any entity other than a sole proprietorship who is under the duty to collect and remit trust fund taxes to the State of New Jersey on behalf of the entity. Trust fund taxes are considered to be Sales Tax, Gross Income Withholding Tax and Motor Fuels Tax. A responsible person may be held personally liable for any of these taxes due from the entity.How is it determined that an officer or employee is responsible?
In 1993, the Tax Court of New Jersey addressed the issues of responsible persons in a case,Cooperstein v. Director, Division of Taxation, 13 NJ Tax 68. The Court analyzed the following nine factors in their determination:
The Division of Taxation will analyze the above factors when there is a question of the personal responsibility of a corporate officer or employee. There may also be additional information requested. Subsequent Tax Court cases addressing responsibility have based their determinations on these factors.
Responsible Person Acknowledgement and Judgment Authorization