Treasurer cracks down on meals tax

Published 7:07 pm Saturday, March 11, 2017

A crackdown by the city treasurer’s office on local eateries that have fallen behind on their meals taxes has left four business owners in hot water.

Summonses against the four business owners were issued in February, and at least three have been served in the days since.

According to Treasurer Ronald Williams, the eateries that are in arrears are Derl’z, East Coast Taco Company, Homer’s Drive-In and the Hog Pen. The latter two have gone out of business.

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Suffolk restaurateurs are required to charge their customers a 6.5-percent city tax on food and drinks served in their establishments. They hold that tax until the 20th of every month, when they are required to turn over to the city the amount due from the prior month.

However, some restaurants get behind if they use the money to pay operating expenses and then are unable to make it up when it comes due, Williams has said.

“We encourage them, in every one of these cases, at the first hint of a problem, to open a separate account and put the meals tax money in a separate account,” he said. “What happens is they commingle the tax in with their operating funds, and they spend it and they don’t have it and that’s where the problem begins.”

Williams said the office tries to work with restaurant owners to set up payment plans when they fall behind.

“We encourage them to make revisions and correct this situation,” he said. “But when they don’t contact us or come in, we’re left with no choice but to turn it over to the courts. The patrons of the restaurant, the citizens of the city, have paid that tax.”

C. Keith Ainsley, a deputy treasurer in Williams’ office, said Donna Perry of Derl’z is behind about $9,453 from July through December. There was a payment in January due to collection activity, but there has been no more money coming in.

“It left us no choice but to take the next step to protect the interests of the city,” Ainsley said.

Ainsley said Jose Moncada of East Coast Taco Company owes $7,401 for August through December.

Ainsley said Todd Ellery Frazier of Homer’s Drive-In owes $6,036 for August through December. Frazier took over from the previous owner, who was in good standing when he sold the business, Ainsley said. The treasurer’s office was attempting to work with Frazier, “but he just abruptly closed up, and that’s when we had trouble communicating with him by phone,” Ainsley said.

Wanda Jean Miller of the Hog Pen owes $1,389.53 for July through January, Ainsley said. That business also is closed.

“When your business shuts down, you’re supposed to settle all your accounts at that time,” Ainsley said.

Perry and Moncada were offered the opportunity to comment for this story and declined. Frazier did not return a Facebook message, and the number for Homer’s Drive-In has been disconnected. A method of contact for Miller could not be located, and the number for the Hog Pen has been disconnected.

Ainsley said none of the three who had already been served with the summons as of Thursday — Perry, Frazier and Miller — had contacted his office or made any payments.