Liquor Stores

Responsible Person Liability for California Liquor Store Owners and Managers

When your business can’t pay its taxes, the state may come after you personally.

Owning or managing a liquor store in California comes with constant pressure—tight margins, regulatory compliance, and relentless tax obligations. When the business falls behind on sales or excise taxes, the California Department of Tax and Fee Administration (CDTFA) often takes a drastic step: it pursues you personally for the debt under California’s Responsible Person Liability laws.

If you’ve received a CDTFA Dual Determination Notice, Responsible Person Letter, or Final Collection Demand, you’re not just dealing with a business issue—you’re facing personal financial exposure that can affect your wages, assets, and credit.

How Responsible Person Liability Works

Under California law, when a corporation, LLC, or partnership fails to pay sales or excise taxes, the CDTFA can hold individuals liable if they had authority or control over collecting and paying those taxes. That often includes:

• Store owners or co-owners
• Corporate officers or managing members
• Bookkeepers, accountants, or controllers
• Employees with check-signing authority
• Managers responsible for filing or remitting tax returns

The CDTFA doesn’t have to prove bad intent. It’s enough for them to show you had the power to pay but failed to ensure the taxes were remitted. Once they decide you’re “responsible,” they can assess the full amount—plus penalties and interest—against you personally.

Why Liquor Stores Are Frequent Targets

Liquor stores are among the CDTFA’s top enforcement priorities because of how the industry operates:

• High cash volume. Liquor stores often handle large amounts of cash, making it easy for the CDTFA to allege “unremitted” sales tax.
• Tight profit margins. When costs rise or sales slow, some owners delay tax payments to cover inventory—an act the CDTFA treats as a personal breach of duty.
• Shared management. Family-run or investor-backed stores often have overlapping control, giving the CDTFA multiple individuals to pursue.
• License transfers. When ABC licenses are sold, suspended, or transferred, unpaid taxes frequently trigger responsible person investigations against prior owners.

Even if your store closed years ago, the CDTFA can still pursue you personally for taxes that went unpaid while you were involved.

Real-World Scenario

A small liquor store falls behind on sales tax during a slow quarter. The corporation eventually closes. Months later, the CDTFA issues Dual Determination Notices against the owner and his wife, who helped with bookkeeping. Each is assessed for the full tax amount—over $80,000—plus penalties. Their personal bank accounts are now subject to levy.

This story is common across California. The CDTFA doesn’t care if the business is gone—it wants someone to pay.

How to Protect Yourself

If you’ve been contacted by the CDTFA, time is critical. You can defend yourself, but only if you act quickly:

1. Respond immediately. These notices have short deadlines; silence equals liability.
2. Clarify your role. Document who made tax, payment, and management decisions.
3. Separate personal and business finances. Never use personal accounts to pay business taxes or expenses.
4. Get experienced legal help early. An attorney familiar with CDTFA enforcement can challenge the agency’s findings and protect your assets.

A Proven Defense for Liquor Store Owners

Attorney Steve Baghoomian has represented California business owners—including liquor store operators—for more than a decade in cases involving CDTFA assessments, dual determinations, and tax collection actions.

Steve’s experience in defending responsible person cases, especially in cash-based retail sectors like liquor and cannabis, gives him a deep understanding of how the CDTFA builds (and often overreaches in) its liability claims.

His mission is clear:

To stop the state from turning your business’s tax problem into your personal debt.

Take Action Before It’s Too Late

Once the CDTFA finalizes a responsible person assessment, it can garnish wages, file liens, and levy accounts. Don’t wait until that happens. If you’ve received a CDTFA letter or believe you may be targeted, contact Baghoomian Law today for a confidential consultation.

Protect yourself. Protect your livelihood. Because when the CDTFA can’t collect from the business—it comes after the people behind it.