I've been working for a company for under a year and I have many responsibilities all related to technology. Recently, I was tasked with buying new tech equipment for employees.

We had a major delay in shipment from our normal supplier so I was told to do research on competitors. After the quote arrived I realized that our previous supplier didn't charge retail tax, but this one did. I mentioned it to my boss (the company owner) and he said something along the lines of "yeah, they think we resell the equipment instead of using it internally. If we ever get audited we're in trouble."

My job is to just get the quotes, do research on the equipment, and make a request for purchase. Is it possible I will also be in legal trouble? Should I report this to my state's revenue department?

This isn't the first time that I have seen unscrupulous business practices. As an example we almost threw away large batteries in the dumpster, but it was prevented.

  • 1
    "should I report" is a question better suited to The Workplace than Law. To be on topic here, the question should focus on potential liability issues, and state them as generally as possible so as not to run afoul of the no legal advice rule.
    – phoog
    Apr 6, 2018 at 14:46
  • Interesting. In the UK that supplier would have had to charge VAT, and if the buying company doesn't resell the items, they can deduct the VAT from their own VAT bill. So the situation described here couldn't arise.
    – gnasher729
    Apr 6, 2018 at 18:09
  • ""should I report" is a question better suited to The Workplace" Why? Just because the illegal activity happened at the workplace? Please don't encourage people to cross-post off-topic questions on other sites where they don't belong.
    – user1323
    Apr 7, 2018 at 1:22
  • "As an example we almost threw away large batteries in the dumpster, but it was prevented." I wouldn't call that unscrupulous. A bad idea, both for the environment and as a potential fire/poison hazard, but not unscrupulous. It's not like you're dumping sewage into the local water supply.
    – JAB
    Apr 8, 2018 at 4:47

2 Answers 2


Oh f***. The whole thing looks very much like tax evasion. And your problem is that you know about it, so if this is found out, you are part of it. You will most likely be in legal trouble yourself.

Before you proceed, you probably want to consult a lawyer, and/or post on workplace.stackexchange.com (which may be able to give advice how to keep your job and keep out of jail at the same time).


In the US, sellers are supposed to pay the state sales tax on a retail sale (the obligation is on the seller, not the buyers). Of course, sellers almost always – but not always – pass that cost on to the buyer. Sometimes the retailer pays the tax for the buyer, as a promotional deal. If a buyer presents a reseller permit, the seller does not incur a tax liability, but the buyer does. The responsibility then usually (probably always) devolves to the buyer to report and pay. The salient regulations for Washington are here, and your state surely has something similar. There are criminal penalties for what you described, for example it is illegal

For any person to aid or abet another in any attempt to evade the payment of any tax or any part thereof; For any purchaser to fraudulently sign or furnish to a seller documentation authorized under RCW 82.04.470 without intent to resell the property purchased or with intent to otherwise use the property in a manner inconsistent with the claimed wholesale purchase

but you don't seem to have done either of these things. Washington state law does not posit a legal duty for employees to turn in the boss, but there are 49 other states. If the boss won't correct the error and you decide to report him, you may get fired (anonymity is not worth much if it's obvious from the circumstances that it was you). You could then sue the boss for firing you, because although employment is at-will (I assume, in your state), there may be a "public policy" exception, whereby they can't fire you for a reason that contravenes a clear public policy – which probably includes "reporting illegal conduct". General "whistleblower" laws probably are not applicable, which pertain to firing public employees reporting official misconduct.

So yeah, get a lawyer.

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