State closes 10 Taco Ticos; owner may declare Chapter 11 to try to reopen

UPDATED — At 10 a.m. March 4, the state seized the assets of Ajax International Group, which owns Taco Tico, and closed 10 of the restaurants.

“This is for nonpayment of retail state sales tax,” says Jeannine Koranda, spokeswoman for the state Department of Revenue. “With that, they seized multiple sites.”

Koranda says there are two warrants against the company.

One, for June through September of 2011, is for $73,315.94. The other, for October 2011 through October 2012, is for $361,623.29.

Owner Mohmood Karim referred calls to his attorney, Bill Zimmerman. Zimmerman says the two most likely options for Karim are to either get on a payment plan or declare Chapter 11 bankruptcy.

“We will do our best to try to get them reopened tomorrow,” Zimmerman says. “Chapter 11 is probably the most straightforward way.”

The seizure included six Wichita Taco Ticos, one in Derby, one in Arkansas City, one in Dodge City and one in Topeka.

“This is the last in a long series of steps that are taken,” Koranda says of the state shutting down a business.

“We always work with the businesses in question,” she says. “If they can go onto a payment plan or work out an arrangement, they will be allowed to reopen.”

Zimmerman says he’s not sure why Karim wasn’t already on a payment plan.

“I know there were a lot of discussions,” he says. “Obviously, the taxes are serious and need to be dealt with.”

The Augusta, Newton and El Dorado Taco Ticos are not corporate restaurants and are still open.

Zimmerman isn’t sure how quickly Karim’s restaurants will be able to reopen.

“We’re certainly going to try to expedite it,” he says. “If they’re out of business, it becomes very difficult to pay the taxes, obviously.”

State closes A Bicycle Service over taxes

WICHITA — Alcoholic Beverage Control agents with the Kansas Department of Revenue this week seized the assets of A Bicycle Service in Derby. The state says the company owes $56,254 in state withholding tax.

Owner Richard Bledsoe couldn’t be reached for comment.

The state closed all three of Bledsoe’s stores, include A Bicycle Service shops in Andover and El Dorado.

In a press release, the state said, “Only after several unsuccessful attempts does the department take the action of seizing assets, which in this instance resulted in the business being closed.”

State closes west-side EconoLodge

UPDATED –The state has closed the EconoLodge at 600 S. Holland near Kellogg and Ridge for nonpayment of taxes.

At noon Tuesday, officials from the state Department of Revenue and the Alcoholic Beverage Control seized the assets of Petali Inc., which Bhupendra Patel owns.

Patel couldn’t be reached for comment.

A Tennessee bank, Community South, and the Small Business Administration also have filed to foreclose on the business. There will be a Feb. 29 sheriff’s sale of the property.

According to state documents, Patel owes $230,629.68 in transient guest taxes from October 2008 to December 2010 and $10,157.88 for sales tax in parts of 2010 and 2011. A sheriff’s auction will be scheduled to sell the contents and other assets of the business.

The west-side EconoLodge is not affiliated with the east-side EconoLodge at 8302 E. Kellogg.

 

 

Melange Custom Jewelry forced to close over taxes

WICHITA — The state closed Melange Custom Jewelry at 718 W. Douglas in Delano this week for failure to pay $31,700 in sales tax.

Sedgwick County sheriff’s officers and the Kansas Department of Revenue seized all bank accounts, cash, inventory and personal property assets of owner Leslie Kinder.

Kinder couldn’t be reached for comment.

There will be a public auction of the store’s assets to pay the taxes.

State closes Frank’s Seneca Auto Service and plans auction to pay back taxes

WICHITA — In addition to seizing and closing Nature’s Way Plant Shop on Tuesday, the state Department of Revenue seized the business assets of Frank Barajas, who has been doing business as Frank’s Seneca Auto Service at 1977 S. Seneca.

According to a release, Barajas owes $8,618 in state sales tax.

The store’s assets will be sold at a public auction to pay for the taxes.

State closes Nature’s Way Plant Shop and plans public auction to collect taxes

WICHITA — The Kansas Department of Revenue on Tuesday seized the business assets of Nature’s Plant Shop LLC, which does business as Nature’s Way Plant Shop at 8474 E. Kellogg.

According to a release from the state, the store owes $55,465 in state income and sales taxes.

Nature’s Way owner John D. Brown couldn’t immediately be reached for comment.

The state will hold a public auction of the nursery’s assets to raise money to pay the taxes.

The release states: “Only after several unsuccessful attempts does the department take the action of seizing assets, which in this instance resulted in the business being closed.”

Kansas Court of Tax Appeals substantially raises fees for commercial property owners wanting to appeal property tax valuations

UPDATED — Commercial property owners who want to appeal their property tax valuations now have something else to complain about.

The Kansas Court of Tax Appeals in Topeka today voted to change the filing fees for those appeals after the Legislature slashed its funding earlier this summer.

“We now have the highest filing fees in the nation for commercial tax appeals,” said lawyer Jim McIntyre.

Fees have doubled, tripled or gone even higher. McIntyre said a lot depends on the number of parcels within a property and what county it is in.

What used to cost, say, $125 to appeal now might cost $1,600 due to the number of parcels, he said.

“It’s going to be a mess.”

He plans to file a lawsuit against the state this week to stop the fees from taking effect.

“A lot of people have a lot of money at stake here,” McIntyre said.

According to Sedgwick County, there were 3,618 appeals of commercial property taxes in 2010.

Since January, there have been 522, all of which required fees.

Until a few years ago, the entire budget for the Court of Tax Appeals came from the state’s general revenue fund and property owners didn’t have to pay to contest their valuations.

In recent years, the majority of the budget still came from the state, and commercial property owners made up most of the rest with filing fees.

Now, commercial property owners will fund about two-thirds of the court’s budget.

“What it does, it restricts access to the courts,” said Jim Hudson, co-owner of Tax Adjustment Specialists, which is one of several Wichita-area companies that help commercial and some residential property owners appeal their taxes.

For small tax issues, he said, the increased fees will mean “it’s just no longer feasible to take those cases.”

Hudson said $25 is about the most commercial property owners have to pay in other states in this area.

“In fact, most of the surrounding states don’t charge anything to file,” he said.

All Kansas property owners — residential and commercial — can make an informal appeal to their county appraiser’s office through a hearing for no fee.

The next level is a small claims division of the Court of Tax Appeals that’s generally used for residential property appeals.

The highest level for appeals is to the judges with the Court of Tax Appeals.

Residential property owners generally don’t have to pay anything to appeal their property taxes unless they take it to the highest level of the court, which isn’t as common as taking it to the small claims division.

That’s part of why McIntyre is filing the suit.

“They’re treating commercial taxpayers worse than residential taxpayers — far worse,” McIntyre said.

He said the suit will allege denial of federal constitutional rights of due process and equal protection.

He said the new fees also violate the state Constitution’s classification scheme in which commercial properties are taxed at 25 percent of their fair market value and residential properties are taxed at 11.5 percent.

“In my opinion, that classification requires that residential . . . homeowners pay based on a proportion of use,” McIntyre says. “That prohibits the Legislature from setting the filing fee at zero.”

McIntyre says that companies asking for industrial revenue bonds or that groups, such as churches, asking for tax exemptions also will have to pay significantly more.

McIntyre says he’ll name Gov. Sam Brownback in the suit.

“Brownback says he’s a big supporter of business, yet the people being gouged here are businesses,” McIntyre said. “The bigger the commercial taxpayer, the more they’re getting gouged.”

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Sea Dreams is closed and seized by the state

WICHITA — In November, Sea Dreams owner Lynne Penny told Have You Heard? she was going to try to keep her store open despite being more than $76,000 behind in state taxes.

“I’ve been trying to work it out with them for about two years now,” she said at the time.

It didn’t work.

The state seized Penny’s assets and this week closed the 10,000-square-foot store, which sells fish, aquariums and related products.

Sea Dreams has been on East Harry in front of Office This for four of its 10 years in business.

The state says Penny owes more than $500,000 in back taxes.

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Geno & John’s Pizza owner owes taxes for previous pizza place

WICHITA — The Kansas Department of Revenue has filed a tax warrant against restaurateur John Giroux for almost $27,000, much of which he says is penalties and interest.

Giroux owns two Geno & John’s Pizza locations, but that’s not what he owes money for.

It’s for a Knolla’s Pizza Giroux used to own near Harry and Webb, which is where one of his Geno & John’s is now.

Late last year, Giroux and Pat Knolla cut ties.

The Department of Revenue is working with Giroux on a repayment plan.

“Business in the last year has been pretty difficult,” Giroux says. “I do everything I can to try and hold on.”

The economy has forced him to slash pizza prices, but Giroux says his costs are still the same.

A couple of months ago, he also opened a second Geno & John’s at 7603 W. 21st St.

“Here I go,” Giroux says, “another store, not really making it.”

He’s not giving up, though.

“I’m a hard worker,” Giroux says. “I keep battling it. I battle for the product. I think I’ve got a great product.”

Clear Lakes Cafe reopens

UPDATED — Thanks to an apparently accommodating landlord, Clear Lakes Cafe is back open.

The state seized and closed Paul Fleming’s restaurant on 21st Street just west of Amidon on Thursday afternoon for nonpayment of more than $28,000 in taxes.

Fleming’s landlord stepped in to pay those taxes today.

“That’s right,” Fleming says. “That’s what happened.”

It’s not clear if the landlord paid simply to keep a restaurant at his development or if it’s because he has equipment in the building that the state would have sold at public auction to cover the taxes.

“I have no idea,” Fleming says.

He says the 2-year-old restaurant had a tough winter.

“I mean a bad winter,” Fleming says. He says that’s what led to him getting behind on taxes.

In an e-mailed statement, Kansas Department of Revenue spokeswoman Freda Warfield said: “Only after several unsuccessful attempts does the Department take this type of aggressive warrant execution action of seizing assets, which in this instance resulted in the business being closed.”

Fleming says it was just “a little misunderstanding with the state.”

He says he changed residences and that could have led to missed letters.

“I called them, and they said I didn’t, and blah, blah, blah,” Fleming says.

“I tried to call them several times, and they never answered,” he says. “I don’t really know what happened on that end.”

In a follow-up phone interview when asked to respond to Fleming’s comments, Warfield said she can’t talk about a specific taxpayer, but she did offer several general thoughts.

“The Department of Revenue never wants to put anybody out of business,” she said. “We don’t want to do that.”

Warfield said the standard practice with businesses behind in taxes is to “communicate with them as much as possible” and work out a repayment plan.

“But sometimes the state is left with no choice but to protect the money of Kansans,” Warfield said, “. . . and sometimes they have to go to the extreme of closing down a business.”