Licensees are aware that in order to renew, transfer, or obtain a PLCB license both the Pennsylvania Department of Revenue and the Pennsylvania Department of Labor and Industry each must issue tax clearances for the licensee. Therefore the licensee has the obligation to be current in both the filing of tax reports and the payment of the taxes due that are associated with those reports. Without the clearances, the respective licenses will not be renewed, validated, and any transfer application or an application for a new license will not be approved.
Licensees experiencing financial difficulties with the payment of their state taxes and the renewal of their PLCB licenses have an additional problem when their state taxes are delinquent and due either to the Pennsylvania Department of Revenue or the Pennsylvania Department of Labor and Industry or both. Those licensees may also receive a citation issued against their PLCB license by the Pennsylvania State Police Bureau of Liquor Control Enforcement for their failure or refusal to “remit” or pay their state taxes to either the Department of Revenue or the Department of Labor and Industry.
A licensee’s failure to pay the state taxes is a violation of the Pennsylvania Tax Reform Code of 1971. How does that become a violation of the Liquor Code, one might ask? The Pennsylvania Liquor Code has a “catch all” provision in Section 471 (47P.S.§ 4-471) which establishes a Liquor Code violation where the licensee has “any violation of any laws of this Commonwealth” relative to alcoholic beverages as well as “the payment of taxes” on alcoholic beverages. Thus the failure to pay taxes due to Pennsylvania becomes a violation of the Liquor Code.
The licensee will be charged with the violation of the Tax Reform Code in the citation, which also will set forth the amount of the taxes due by the licensee as well as the type of tax, the tax period involved and the tax department, for example, sales taxes due to the Pennsylvania Department of Revenue.
Also to compound the problem, licensees who have had their state sales tax license revoked by the Department of Revenue will also be separately cited by the State Police for engaging in taxable sales without a sales tax license.
Obviously where a licensee has any outstanding taxes due to Pennsylvania, the licensee cannot obtain the required tax clearance to renew the PLCB license, and therefore the license will be in an inactive status.
A licensee will have to pay the tax arrears in order to renew the PLCB license or consider seeking protection under the U.S. Bankruptcy Code.
In any event, whatever course of action the licensee selects, both the renewal of the license and the Liquor Code citation will have to be resolved.
Licensees who find themselves in such circumstances should seek guidance from their lawyer as well as their tax accountant.