Overview
If you have a substantial amount of sales tax owed to the State, you are probably thinking about getting on a payment plan. Payment plans are never a one-size-fits-all policy with the State as they tend to be with the IRS.
For example, the IRS will give a taxpayer a 60-month streamline payment plan for debts under $25,000.00, regardless of how much the taxpayer earns.
Payment Plan Options Based on Business Status
For Open Businesses
If your business is currently open, you may get a payment plan ranging from 12 to 60 months. The specific terms depend on several factors:
- How many payment plans you have had in the past
- The amount due
- Whether a down payment is made
However, if your business is open and you are seeking a payment plan, the State interprets this as a sign of desperation. As a result, they may offer you the most aggressive payment plan possible.
For Closed Businesses
If your business is now closed, you have the most latitude in negotiating a payment plan. In this scenario, you can hope for terms closer to the 60-month mark.
Restrictions
If you are in a revocation status or have a revocation hearing, a payment plan is not an option. In such cases:
- It is either pay in full or close your doors.
Professional Assistance
Our office routinely handles payment plans with the State.
Call us for representation at (888) 577-1482.
Frequently Asked Questions
What factors influence the length of a State sales tax payment plan?
The length of a State sales tax payment plan depends on whether your business is open or closed, how much is owed, if a down payment is made, and your history of past payment plans. Open businesses often receive shorter and more aggressive terms than closed ones.
Can I get a payment plan if my business is under revocation?
No, if your business is currently in revocation status or has a revocation hearing scheduled, you are not eligible for a payment plan. Your only options are to pay in full or shut down operations.
Are payment plans more flexible for closed businesses?
Yes, closed businesses typically have more flexibility and negotiating power when arranging a payment plan with the State. They are more likely to receive plans closer to 60 months.
Why does the State offer aggressive payment terms for open businesses?
The State views an open business requesting a payment plan as financially distressed, prompting them to impose stricter, faster repayment schedules to reduce their risk of non-payment.
Should I get professional help to set up a payment plan?
Yes, working with a professional can significantly improve your chances of securing favorable terms. Experienced representatives can navigate the State’s policies and negotiate on your behalf.