North Carolina – Manager of LLC was Individually Liable Responsible Person

SALT Report 1821 – The North Carolina Department of Revenue determined that the manager of a limited liability company was the “responsible person” and liable for the LLC’s delinquent sales tax, as well as penalties and interest.  The Taxpayer appealed the decision however, during the appeal the Taxpayer’s own evidence showed that the LLC’s operating agreement identified the Taxpayer as the manager.  It was also shown that the LLC’s annual report, which was filed by the Taxpayer, identified him as the manager of the LLC, and minutes from board meetings indicated that the he was the manager.

N.C. Gen. Stat. § 105-242.2 extends personal and individual liability to “each responsible person” of a limited liability company for any default by the company in paying certain taxes after they become collectible by law.  And, N.C. Gen. Stat. § 57C-3-25 provides that the North Carolina Department of Revenue may rely upon an LLC’s most recent annual report and any amendments on file with the Secretary of State to identify its managers.

Based on the above statutes and the Taxpayer’s own evidence, the Appeals Board ruled that the Taxpayer was the manager of the LLC and met the requirements of a responsible person.   Therefore, the Taxpayer was found personally and individually liable for the LLC’s unpaid sales tax as well as all assessed penalties and interest.

For Further Information:

North Carolina Department of Revenue – Final Agency Decision 11 REV 13094