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