A recent lecture by the Bar Association of Erie County (BAEC) Headquarters educated local attorneys, CPA’s and high level government officials about widespread under reporting of sales tax by business and the efforts New York State is making to enforce payment of these taxes legally owed by the businesses.

Jeffrey Freedman, senior partner, Jeffrey Freedman Attorneys at Law, helped organize the lecture and introduced the two speakers William J. Comiskey, Esq., Deputy Commissioner for Enforcement, NYS Department of Taxation and Finance; and Michael T. Kelly, Esq., a former prosecutor who is now in private practice and has defended clients in several cases with the NYS Tax Department. Freedman also moderated the question and answer period.

Cominskey spoke about widespread underreporting of sales tax by business. He said the state has been investigating sales tax reporting by sending agents undercover rather than solely by auditing businesses. They found that large businesses, as well as “mom and pop” shops, routinely under report sales tax which results in higher taxes for honest tax paying citizens as legislators respond by raising tax rates.

Cominskey and Kelly said that 90 percent of vendors do not keep the accurate records required by auditors. Retail businesses are required to keep records of every sale; amounts paid, charged, and the amount of tax payable for the sale. Kelly cautioned that saving only receipts and bank deposits can result in the state estimating sales tax due and coming up with an inaccurate figure because the method used doesn’t take into account sales or specials.

Busness people must remember they are fiduciaries of sales tax revenues, Comiskey added. They are responsible to collect the funds, but the funds belong to the state.