What every entrepreneur should learn from The Human Bean situation:
A sign of trouble ahead is when a business is unable to meet sales and payroll tax remittance requirements. Why? Because it’s another party’s money.
A retailer is nothing more than a conduit for State and Local tax authorities as a retailer merely collects sales tax at the time of sale and then remits these amounts to the appropriate tax authority in a timely manner. This is why I typically recommend to all retailers, large and small and especially new, that a “monthly” filing frequency is a wise business decision. Why? Because otherwise the money to be earmarked for remittance simply grows in the business’s bank account and is often times spent for other purposes without consideration of “holdback” for pending sales tax liability purposes.
An employer is nothing more than a conduit for Federal and State tax authorities as an employer merely collects applicable wage withholding taxes on behalf of the employees at the time of payroll processing and then remits these amounts to the appropriate tax authority in a timely manner. This is why I typically recommend to all employers, large and small and especially new, that outsourcing payroll processing (compute payroll, issue checks, make tax deposits, and file returns) is a wise business decision. Why? Because being short of funds at the time the taxes are due can be crippling as the actual and inferred penalties for non-compliance are quite high.
So yes, retailers and employers have critical responsibilities beyond just providing great products and services to customers and clients.
Think before you blink.
