Kansas Administrative Regulations

Regulation Number:92-19-64a
Agency Title: KANSAS DEPARTMENT OF REVENUE
Article Title: Kansas Retailers' Sales Tax
Tax Type:Kansas Retailers' Sales Tax
Brief Description:Responsible individuals.
Keywords:
Effective Date:07/27/2001


Body:

92-19-64a. Responsible individuals. (a) Under
K.S.A. 79-3643, and amendments thereto, a person may
be held liable for sales taxes not paid to the state of Kansas
if that person is a responsible individual, and has willfully
failed to collect, account for, or pay over to the state
the taxes that are due, or has otherwise acted to evade or
defeat payment of these taxes.
(b) ‘‘Responsible individual’’ shall mean any person
with sufficient status, duties, and authority to have significant
control over business finances or the disbursement
of business funds.
(c) Having one or more of the following factors that
establish status, duties, and authority of a person shall be
sufficient to establish that the person has significant control
over business finances or the disbursement of business
funds:
(1) A significant ownership interest in a business;
(2) a significant involvement in the day-to-day management
of the business;
(3) the authority to sign business checks or tax returns;
(4) the authority to direct payment of business funds
to creditors;
(5) the authority to pledge business assets as collateral
for loans, advances, or lines of credit for the business;
(6) the authority to bind the business to contracts entered
into as part of the day-to-day business operations;
or(7) the authority to hire or fire employees who are authorized
to perform any act described in paragraphs (3)
through (6) of this subsection.
(d) The term ‘‘willfully’’ in K.S.A. 79-3643, and amendments
thereto, shall have the same meaning as when the
term ‘‘willfully’’ is used in K.S.A. 79-32,107(e), and
amendments thereto.
(e) Acts or omissions showing that a responsible individual
acted willfully in failing to collect, account for, or
remit taxes may include one or more of the following:
(1) Making a deliberate choice that the business should
pay other creditors in spite of having knowledge that
taxes collected are not being remitted to the state of Kansas;
(2) having knowledge of the tax delinquency and failing
to exercise authority to rectify it if funds were available
to pay the state of Kansas;
(3) performing a voluntary or intentional act or failing
to perform such an act with knowledge that the act or
omission will result in the failure of the business to collect,
account for, or remit taxes owed to the state of Kansas;
(4) failing to investigate or to correct mismanagement
after notice that taxes owed to the state of Kansas are not
being remitted; or
(5) embezzling business funds.
(f) The liability of a responsible individual who acted
willfully shall survive the dissolution of a corporation or
other business. (Authorized by K.S.A. 2000 Supp. 79-3618;
implementing K.S.A. 2000 Supp. 79-3643; effective July
27, 2001.)