The state of Massachusetts is serious about collecting corporate income taxes. An owner of a bankrupt Massachusetts corporation learned about Massachusetts corporate tax collection when he tried to renew his Florida drivers’s license. At attorney wrote me an email about one of his clients who was a principal owner of a Massachusetts corporation doing business in that state. The business owed corporate taxes to the state. The client owner owed no personal taxes. The attorney’s client resides permanently in Florida.
Massachusetts law enables the state to suspend your driver’s license if you don’t pay state taxes. The law makes principal owners of a corporation liable for the corporation’s income tax. After this client’s corporation filed bankruptcy owing state corporate income tax the state of Massachusetts listed the individual principal on a national registry of corporate tax deadbeats. It turns out that Florida checks the national registry, and our state respects suspensions imposed by other states for tax liability. This unsuspecting owner of a failed Massachusetts business finds himself unable to drive in Florida or Massachusetts until he pays his bankrupt corporation’s state income tax.