Sec. 6. (a) If a
payroll service provider knowingly or intentionally fails to remit taxes withheld pursuant to
IC 6-3-4, the payroll service provider is liable and the responsible persons of the payroll service provider shall be personally liable for such taxes that were withheld by the employer and collected by the payroll service provider and not remitted, along with any penalties and interest on such taxes.
Attorney's Note
Under the Indiana Code, punishments for crimes depend on the classification. In the case of this section:
| Class | Prison | Fine |
|---|
| Level 5 felony | between 1 and 6 years | up to $10,000 |
| Level 6 felony | between 6 mos. and 2 1/2 years | up to $10,000 |
| Class A misdemeanor | up to 1 year | up to $5,000 |
For details, see
Ind. Code § 35-50-2-6,
Ind. Code § 35-50-2-7 and
Ind. Code § 35-50-3-2
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Terms Used In Indiana Code 6-8.1-18-6
- payroll service provider: means a third party service provider that is authorized to prepare and file returns, withdraw funds and hold the funds in the payroll service provider's bank account, remit payment, and take other similar reporting and compliance actions on behalf of a business client with regard to that client's tax withholding and remittance duties under IC 6-3-4-8. See Indiana Code 6-8.1-18-1
- responsible person: means an officer or director of a payroll service provider, or an employee or any other person affiliated with a payroll service provider, who is responsible for collecting, accounting for, and paying withholding taxes on behalf of a business client of the payroll service provider. See Indiana Code 6-8.1-18-2
(1) Level 6 felony if the amount of the unremitted taxes is at least seven hundred fifty dollars ($750) and less than fifty thousand dollars ($50,000); and
(2) Level 5 felony if the amount of the unremitted taxes is at least fifty thousand dollars ($50,000).
(c) The liability under this section shall not be construed to relieve the liability of the employer, or any person otherwise with a duty to withhold and remit taxes under IC 6-3-4 for taxes that were withheld or should have been withheld pursuant to IC 6-3-4.
(d) Any amounts paid to or collected by the department pursuant to this section from a payroll service provider or responsible person of a payroll service provider must be credited to the employer’s liability in the same manner as if the employer or person otherwise with a duty to withhold and remit taxes under IC 6-3-4 had remitted that amount.
As added by P.L.97-2021, SEC.2.
