Katie was in trouble and needed help. Here are some things that Katie did not understand about her role as a retail business owner and as an employer. Katie became a trustee of government funds the day she sold the first item in her retail store and the day she hired an employee. First, collection of Georgia Sales and Use Tax is the responsibility of certain types of businesses, retail being one of them. The state of Georgia levies the tax against certain consumer products.
End consumers pay the sales tax on the products they buy.
If a business uses products, then the business pays a use tax. The sales tax the business collects is neither income nor expense to the business. This collected money belongs to specific government entities, in some cases to the state of Georgia and in some cases to the local government. When a business owner uses those collected sale tax funds for business purposes, the owner is misusing public funds. Many small business owners seem to think that this money belongs to them until they remit it to the state.