§ 105-242.2. Personal liability when certain taxes not paid. - North Carolina Statutes

§ 105‑242.2.  Personalliability when certain taxes not paid.

(a)        Definitions. – Thefollowing definitions apply in this section:

(1)        Business entity. – Acorporation, a limited liability company, or a partnership.

(2)        Responsible person.– Any of the following:

a.         The president,treasurer, or chief financial officer of a corporation.

b.         A manager of alimited liability company or a partnership.

c.         An officer of acorporation, a member of a limited liability company, or a partner in apartnership who has a duty to deduct, account for, or pay taxes listed insubsection (b) of this section.

d.         A partner who isliable for the debts and obligations of a partnership under G.S. 59‑45 orG.S. 59‑403.

(b)        Responsible Person.– Each responsible person in a business entity is personally and individuallyliable for all of the taxes listed in this subsection. If a business entitydoes not pay a tax it owes after the tax becomes collectible under G.S. 105‑241.22,the Secretary may enforce the responsible person's liability for the tax bysending the responsible person a notice of proposed assessment in accordancewith G.S. 105‑241.9. The taxes for which a responsible person may be heldpersonally and individually liable are:

(1)        All sales and usetaxes collected by the business entity upon its taxable transactions.

(2)        All sales and usetaxes due upon taxable transactions of the business entity but upon which itfailed to collect the tax, but only if the person knew, or in the exercise ofreasonable care should have known, that the tax was not being collected.

(3)        All taxes due fromthe business entity pursuant to the provisions of Articles 36C and 36D ofSubchapter V of this Chapter and all taxes payable under those Articles by itto a supplier for remittance to this State or another state.

(4)        All income taxesrequired to be withheld from the wages of employees of the business entity.

(c)        Repealed by SessionLaws 1991 (Regular Session, 1992), c. 1007, s. 15.

(d)        Distributions. – Anofficer, partner, trustee, or receiver of a business entity required to file areport with the Secretary who has custody of funds of the entity and who allowsthe funds to be paid out or distributed to the owners of the entity withouthaving remitted to the Secretary any State taxes that are due is personallyliable for the payment of the tax. The Secretary may enforce an individual'sliability under this subsection by sending the individual a notice of proposedassessment in accordance with G.S. 105‑241.9.

(e)        Statute ofLimitations. – The period of limitations for assessing a responsible person forunpaid taxes under this section expires one year after the expiration of theperiod of limitations for assessing the business entity.  (1939, c. 158, s. 923; 1941,c. 50, s. 10; 1955, c. 1350, s. 23; 1973, c. 476, s. 193; c. 1287, s. 13; 1983,c. 220, s. 1; 1991, c. 690, s. 7; 1991 (Reg. Sess., 1992), c. 1007, s. 15;1995, c. 390, s. 15; 1995 (Reg. Sess., 1996), c. 647, s. 52; 1997‑6, s.9; 1998‑212, s. 29A.14(p); 1999‑337, s. 34; 2007‑491, s. 34;2008‑134, s. 10(a).)