I want to file a Chap. 7 for my small business. I have unpaid business sales tax debts. Are they dischargeable?
Tax debt is not dischargeable in most cases unless. There are circumstances where it would be discharged but most times it is not
I don't think you can ever discharge sales taxes in a Chapter 7. Sales taxes are considered property of the trust. A vendor who collects sales tax holds the money in trust for the state until they pay it to the state. I think the state would argue in a chapter 7 case that the sales tax was fraudulently used by the business and therefore should not be dischargeable.