# A New EIN Won’t Erase Your Sales Tax Debt

Canonical: https://trykintsugi.com/blog/a-new-ein-wont-erase-sales-tax-debt
Published: 2026-03-16

Why dissolving an entity does not erase sales tax exposure and what founders should do instead.

A founder who discovers years of unpaid sales tax may consider dissolving the
old entity, forming a new LLC, and transferring the business to get a fresh
start. That does not erase the liability and can make the situation worse.

## How back taxes accumulate

Economic nexus rules allow states to require remote sellers to collect tax
when their activity crosses a state threshold. A business can trigger nexus
in multiple states as it grows, while back taxes, interest, and penalties
continue accumulating from the date the obligation began.

## Why a new EIN does not solve the problem

States address these transactions through successor-liability rules. A new
entity continuing the same business can inherit the predecessor's tax
obligations. Texas, Louisiana, California, and Washington each have rules
that can make a successor responsible for unpaid taxes in specific
circumstances.

The details vary by state and situation. Get qualified tax and legal advice
before restructuring a business with historical exposure.

## What to do instead

1. Run a nexus assessment to understand where and how long exposure exists.
2. Consider a Voluntary Disclosure Agreement where appropriate.
3. Register in the jurisdictions where you have an obligation.
4. Automate calculation, collection, filing, and remittance going forward.

The goal is to address historical exposure through a legitimate remediation
plan and prevent the same problem from rebuilding as the business grows.