New bill would allow "tax delinquent" bars and restaurants to keep liquor licenses [UPDATE]
Every day, the Minnesota Department of Revenue updates a public list of businesses that are more than ten days behind on their liquor tax obligations. After another three days, those same businesses are forbidden from purchasing more booze until they settle their bill, and any distributor who's caught breaking this law could lose their own license for 60 days and face a $2,000 fine.
Heidi's gets dinged in state's latest liquor posting
|Rep. Paul Anderson (R-Starbuck)|
Anderson says he was motivated by a restaurant in his district that found itself on the delinquency list after accidentally undercharging customers on liquor taxes. Although he declines to name the restaurant, he insists, "This is not an isolated incident."
Indeed, other restaurants have cried foul in recent years. Heidi's once turned up on the delinquency list even though the owners were able to provide City Pages with a tax statement showing a zero-balance.
For Anderson's legislation to be effective, it requires both the business and the state to work out a repayment deal in good faith. A spokesman for the Minnesota Department of Revenue declined to comment on this story, noting on Monday that members of the department's policy and legal teams were still reviewing the matter with legislators.
::: UPDATE :::
The Minnesota Department of Revenue produced a memo this morning estimating that Anderson's legislation -- which was intended as an amendment to an broader tax bill -- would cost the state more than $2.4 million (see page 2). It assumes that all tax delinquents would want a repayment plan and that one out of five would default, a number, they say, based on previous experience.
As a result, Rep. Greg Davids spiked the amendment for fear that it would detract votes from the main bill. He had been carrying the amendment at the committee level on behalf of Anderson (who couldn't be reached for comment). But Davids promised to redraft and reintroduce it next year with a narrow definition of who could and couldn't take advantage of a repayment plan, saying, "We'll live to fight another day."