While tax liability may mean the same thing for every individual, corporation, or entity, the amount payable to tax authorities is different.Tax liability is the total tax debt an individual, business, or entity owes to taxing authorities. Tax liability is incurred through earnings; a company making sales, an individual with an income, sales of an asset, and other taxable events. Tax liability varies in the amount owed by each entity base on the current tax laws. The tax liability of a company is not the same as that of individuals with wages or salaries. An individual may pay taxes on particular or multiple sources of income while a company pays sales tax on each unit of product sold.