Tax Update Blog: Permalink

« Previous · Tax Update Blog Home · Next »

Know your customer!

October 12, 2009

Especially when you are offering discounts to them for buying big-ticket items with cash to avoid sales taxes:

Albany, N.Y.--A Long Island, N.Y.-based jeweler charged as part of an ongoing sting operation involving sales tax collection pleaded guilty to sales tax evasion and was ordered to pay more than $200,000, according to a release from the state Department of Taxation and Finance.
Frucci's Jewelers Ltd., of Garden City South, N.Y., was sentenced recently in Nassau District Court and paid $207,596, which includes what it owed in back state and local taxes plus interest and penalties, the Oct. 2 release states.

...

The Frucci case is the first to arise from an undercover investigation that the state agency dubbed "Operation Goldrush."

Conducted by the state tax department's Special Investigations Unit in Nassau County and the department's Petroleum, Alcohol and Tobacco Bureau, Operation Goldrush launched in February 2008 and, at that time, had identified 11 jewelry stores that, according to the tax department, offered sales-tax-free purchases to undercover investigators if they paid with cash.

The Moral? Paying in cash doesn't make taxes go away. Not legally, anyway.

Tags: Sales and Use Tax.tax crime.