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

Covington, GA |

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

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Attorney answers 2


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.

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