Are small business sales taxes dischargeable in Chap 7 in GA?

I want to file a Chap. 7 for my small business. I have unpaid business sales tax debts. Are they dischargeable?

Covington, GA -

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Attorney Answers (2)

Danielle Jeanne Eliot

Danielle Jeanne Eliot

Bankruptcy Attorney - Atlanta, GA

Tax debt is not dischargeable in most cases unless. There are circumstances where it would be discharged but most times it is not

Jeffrey Branan Kelly

Jeffrey Branan Kelly

Chapter 7 Bankruptcy Attorney - Dalton, GA

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.

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There are different types of debt, but all involve one person (the debtor) owing money to another (the creditor). Terms of repayment are governed by a contract.

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Debt discharge

Debt discharge is when a debtor is no longer responsible for paying off some or all of a debt. This discharge can occur for some types of debts in bankruptcy.

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