Is Alabama sales tax owed to the Department of Revenue dischargeable in bankruptcy?
In Peiffer v. Alabama Department of Revenue, 126 Bankr. 364 (1991), the Bankruptcy Court held that the Alabama sales tax constitutes a “trust fund” tax and as such is not dischargeable in bankruptcy pursuant to 11 U.S.C. Section 507(a)(7)(c). A “trust fund” tax is a tax which is levied directly on the consumer and required to be collected by the merchant and reported to the state.
Related Questions
- What happens to my existing inventory of a product when the Department of Revenue determines that the product is a cigarette for youth access and taxation purposes?
- Does the ADOR (Alabama Department of Revenue) provide material I can give my clients to explain the new regulations?
- Is Alabama sales tax owed to the Department of Revenue dischargeable in bankruptcy?
