RCW 69.50.565
Unpaid trust fund taxes—Limited liability business entities—Liability of responsible individuals—Administrative hearing.
(1) Whenever the board determines that a limited liability business entity has collected trust fund taxes and has failed to remit those taxes to the board and that business entity has been terminated, dissolved, or abandoned, or is insolvent, the board may pursue collection of the entity's unpaid trust fund taxes, including penalties on those taxes, against any or all of the responsible individuals. For purposes of this subsection, "insolvent" means the condition that results when the sum of the entity's debts exceeds the fair market value of its assets. The board may presume that an entity is insolvent if the entity refuses to disclose to the board the nature of its assets and liabilities.
(2)(a) For a responsible individual who is the current or a former chief executive or chief financial officer, liability under this section applies regardless of fault or whether the individual was or should have been aware of the unpaid trust fund tax liability of the limited liability business entity.
(b) For any other responsible individual, liability under this section applies only if he or she willfully failed to pay or to cause to be paid to the board the trust fund taxes due from the limited liability business entity.
(3)(a) Except as provided in this subsection (3)(a), a responsible individual who is the current or a former chief executive or chief financial officer is liable under this section only for trust fund tax liability accrued during the period that he or she was the chief executive or chief financial officer. However, if the responsible individual had the responsibility or duty to remit payment of the limited liability business entity's trust fund taxes to the board during any period of time that the person was not the chief executive or chief financial officer, that individual is also liable for trust fund tax liability that became due during the period that he or she had the duty to remit payment of the limited liability business entity's taxes to the board but was not the chief executive or chief financial officer.
(b) All other responsible individuals are liable under this section only for trust fund tax liability that became due during the period he or she had the responsibility or duty to remit payment of the limited liability business entity's taxes to the board.
(4) Persons described in subsection (3)(b) of this section are exempt from liability under this section in situations where nonpayment of the limited liability business entity's trust fund taxes was due to reasons beyond their control as determined by the board by rule.
(5) Any person having been issued a notice of unpaid trust fund taxes under this section is entitled to an administrative hearing under RCW 69.50.334 and any such rules the board may adopt.
(6) This section does not relieve the limited liability business entity of its trust fund tax liability or otherwise impair other tax collection remedies afforded by law.
(7) The definitions in this subsection apply throughout this section unless the context clearly requires otherwise.
(a) "Board" means the state liquor and cannabis board.
(b) "Chief executive" means: The president of a corporation or for other entities or organizations other than corporations or if the corporation does not have a president as one of its officers, the highest ranking executive manager or administrator in charge of the management of the company or organization.
(c) "Chief financial officer" means: The treasurer of a corporation or for entities or organizations other than corporations or if a corporation does not have a treasurer as one of its officers, the highest senior manager who is responsible for overseeing the financial activities of the entire company or organization.
(d) "Limited liability business entity" means a type of business entity that generally shields its owners from personal liability for the debts, obligations, and liabilities of the entity, or a business entity that is managed or owned in whole or in part by an entity that generally shields its owners from personal liability for the debts, obligations, and liabilities of the entity. Limited liability business entities include corporations, limited liability companies, limited liability partnerships, trusts, general partnerships and joint ventures in which one or more of the partners or parties are also limited liability business entities, and limited partnerships in which one or more of the general partners are also limited liability business entities.
(e) "Manager" has the same meaning as in *RCW 25.15.005.
(f) "Member" has the same meaning as in *RCW 25.15.005, except that the term only includes members of member-managed limited liability companies.
(g) "Officer" means any officer or assistant officer of a corporation, including the president, vice president, secretary, and treasurer.
(h)(i) "Responsible individual" includes any current or former officer, manager, member, partner, or trustee of a limited liability business entity with unpaid trust fund tax liability.
(ii) "Responsible individual" also includes any current or former employee or other individual, but only if the individual had the responsibility or duty to remit payment of the limited liability business entity's unpaid trust fund tax liability.
(iii) Whenever any taxpayer has one or more limited liability business entities as a member, manager, or partner, "responsible individual" also includes any current and former officers, members, or managers of the limited liability business entity or entities or of any other limited liability business entity involved directly in the management of the taxpayer. For purposes of this subsection (7)(h)(iii), "taxpayer" means a limited liability business entity with unpaid trust fund taxes.
(i) "Trust fund taxes" means taxes collected from buyers and deemed held in trust under RCW 69.50.535.
(j) "Willfully failed to pay or to cause to be paid" means that the failure was the result of an intentional, conscious, and voluntary course of action.
[ 2015 2nd sp.s. c 4 § 202.]
NOTES:
*Reviser's note: RCW 25.15.005 was repealed by 2015 c 188 § 108, effective January 1, 2016.
Findings—Intent—Effective dates—2015 2nd sp.s. c 4: See notes following RCW 69.50.334.
Structure Revised Code of Washington
Title 69 - Food, Drugs, Cosmetics, and Poisons
Chapter 69.50 - Uniform Controlled Substances Act.
69.50.102 - Drug paraphernalia—Definitions.
69.50.201 - Enforcement of chapter—Authority to change schedules of controlled substances.
69.50.205 - Schedule II tests.
69.50.207 - Schedule III tests.
69.50.209 - Schedule IV tests.
69.50.213 - Republishing of schedules.
69.50.214 - Controlled substance analog.
69.50.302 - Registration requirements.
69.50.305 - Procedure for denial, suspension, or revocation of registration.
69.50.306 - Records of registrants.
69.50.311 - Triplicate prescription form program—Compliance by health care practitioners.
69.50.315 - Medical assistance—Drug-related overdose—Prosecution for possession.
69.50.317 - Opioid drugs—Communication with patient.
69.50.325 - Cannabis producer's license, cannabis processor's license, cannabis retailer's license.
69.50.327 - Cannabis processors—Incorporation of characterizing flavor in vapor products.
69.50.331 - Application for license.
69.50.334 - Denial of application—Opportunity for hearing.
69.50.335 - Cannabis retailer licenses—Social equity applicants—Rules—Definitions.
69.50.336 - Social equity in cannabis task force.
69.50.342 - State liquor and cannabis board—Rules.
69.50.345 - State liquor and cannabis board—Rules—Procedures and criteria.
69.50.346 - Labels on retail products.
69.50.348 - Representative samples of cannabis, useable cannabis, or cannabis-infused products.
69.50.351 - Board members and employees—Conflict of interest.
69.50.354 - Retail outlet licenses.
69.50.357 - Retail outlets—Rules.
69.50.363 - Cannabis processors, employees—Certain acts not criminal or civil offenses.
69.50.366 - Cannabis producers, employees—Certain acts not criminal or civil offenses.
69.50.369 - Cannabis producers, processors, researchers, retailers—Advertisements—Rules—Penalty.
69.50.372 - Cannabis research license.
69.50.375 - Cannabis retailers—Medical cannabis endorsement.
69.50.378 - Cannabis retailer holding medical cannabis endorsement—THC concentration in products.
69.50.385 - Common carriers—Licensing—State liquor and cannabis board to adopt rules.
69.50.395 - Licensed cannabis businesses, agreements—Disclosure to state liquor and cannabis board.
69.50.401 - Prohibited acts: A—Penalties.
69.50.4011 - Counterfeit substances—Penalties.
69.50.4012 - Delivery of substance in lieu of controlled substance—Penalty.
69.50.4014 - Possession of forty grams or less of cannabis—Penalty.
69.50.4015 - Involving a person under eighteen in unlawful controlled substance transaction—Penalty.
69.50.4016 - Provisions not applicable to offenses under RCW 69.50.410.
69.50.402 - Prohibited acts: B—Penalties.
69.50.403 - Prohibited acts: C—Penalties.
69.50.404 - Penalties under other laws.
69.50.405 - Bar to prosecution.
69.50.406 - Distribution to persons under age eighteen.
69.50.408 - Second or subsequent offenses.
69.50.410 - Prohibited acts: D—Penalties.
69.50.412 - Prohibited acts: E—Penalties.
69.50.4121 - Drug paraphernalia—Selling or giving—Penalty.
69.50.413 - Health care practitioners—Suspension of license for violation of chapter.
69.50.414 - Sale or transfer of controlled substance to minor—Cause of action by parent—Damages.
69.50.415 - Controlled substances homicide—Penalty.
69.50.416 - Counterfeit substances prohibited—Penalties.
69.50.420 - Violations—Juvenile driving privileges.
69.50.430 - Additional fine for certain felony violations.
69.50.438 - Cathinone or methcathinone—Additional fine.
69.50.440 - Possession with intent to manufacture—Penalty.
69.50.450 - Butane or other explosive gases.
69.50.455 - Synthetic cannabinoids—Unfair or deceptive practice under RCW 19.86.020.
69.50.460 - Cathinone or methcathinone—Unfair or deceptive practice under RCW 19.86.020.
69.50.465 - Conducting or maintaining cannabis club—Penalty.
69.50.470 - Medication disposal, no penalty for compliance.
69.50.475 - Cannabis retail outlets—Sale to persons under the age of twenty-one—Penalty.
69.50.500 - Powers of enforcement personnel.
69.50.501 - Administrative inspections.
69.50.502 - Warrants for administrative inspections.
69.50.504 - Cooperative arrangements.
69.50.505 - Seizure and forfeiture.
69.50.506 - Burden of proof; liabilities.
69.50.508 - Education and research.
69.50.509 - Search and seizure of controlled substances.
69.50.510 - Search and seizure at rental premises—Notification of landlord.
69.50.511 - Cleanup of hazardous substances at illegal drug manufacturing facility—Rules.
69.50.515 - Pharmacies—Cannabis—Notification and disposal.
69.50.525 - Diversion prevention and control—Report.
69.50.530 - Dedicated cannabis account (as amended by 2022 c 16).
69.50.540 - Dedicated cannabis account—Appropriations (as amended by 2022 c 16).
69.50.550 - Cost-benefit evaluations.
69.50.561 - Advice and consultation services—Licensed cannabis businesses.
69.50.563 - Licensed cannabis businesses—Civil penalty—Rules.
69.50.564 - Licensed cannabis businesses—Settlement agreement.
69.50.570 - Bundled transactions—Retail sales—Subject to tax—Exception.
69.50.575 - Cannabis health and beauty aids.
69.50.585 - Branded promotional items—Nominal value—Personal services.
69.50.587 - Cannabis science task force reports—Board rules.
69.50.601 - Pending proceedings.
69.50.602 - Continuation of rules.
69.50.603 - Uniformity of interpretation.