State Tax Problems

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In order to fund operations and salaries, all 50 state governments and the District of Columbia collect taxes from their citizens, each in its own distinct way.  Between income tax, sales tax, property tax, excise tax, and more, state taxes can add up quickly, especially for small businesses and independent contractors. 

If you are facing a state tax issue, it is important to remember that state tax collection has similarities and differences from IRS tax collection. 

  • States, like the IRS, have the power to levy/garnish wages, seize assets and property, and file liens. 
  • States can threaten and even suspend state-issued licenses—including professional licenses, liquor or other business licenses, even driver’s licenses—as well as business or vehicle registration. The state can frustrate you in ways the IRS can not. 
  • States are often more aggressive in collection actions, as they are generally better staffed (per delinquent account) than the IRS.  
  • States may file liens and issue levies at lower liability amounts.  
  • States do not have the power to levy Social Security and certain Federal payments. 
  • States may not affect your passport or immigration status in the way that the IRS does. 
  • States may not provide as many programs to seek relief on your liability. 
  • States may attempt to collect through their own revenue department, or they may refer collections to authorized collection agencies, the Attorney General’s office, or law firms. The same liability can change hands several times. 

In addition to differences in manner of scope of collections, states follow their own notice requirements and terminology, which may or may not match the IRS.   

  • For example, New York State issues “Tax Warrants” which essentially function as tax liens. Many New Yorkers misunderstand this language and fear an imminent arrest, when this is not the intent of the notice. 
  • Several states call a levy a “lien,” which can cause confusion and unexpected financial strain. 

As you can imagine, expecting the process and terminology to perfectly mirror IRS can create problems for an uninformed taxpayer. Negotiating with state taxing authorities is its own unique challenge.
 
Luckily, just as is the case with the IRS, you have a right to hire representation for your state tax matter.  WatchGuard Representation assists clients on a wide variety of state tax issues, including: 

  • Income tax 
  • Business tax 
  • Employee withholding 
  • Sales tax 
  • Excise tax 
  • And more. 

 To learn more about what WatchGuard Tax Services can do for you on your state tax issue, please call or fill out the contact form on this page.

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