Restaurants owing back taxes could lose ABC license

Restaurants that owe back taxes could now lose their ABC license. A new state law lets the ABC board revoke a restaurant's alcohol permit if their taxes are more than 90 days late on paying their taxes. That includes any taxes: meals taxes, business license taxes, or property taxes.

Said Cheterfield's Commissioner of the Revenue Joe Horbal, "The ABC license is a big deal for restaurants and if they don't have it, I think most of them would find it very difficult to make a profit."

Richmond officials tells us 543 restaurants are currently late on their meal taxes, owing a total of approximately $1 million. They say state law prohibits revealing to us which restaurants are late. Officials say 44 Henrico restaurants owe a collective $56,000, Chesterfield has 17 delinquent restaurants owing $25,000 total, and Hanover only has 10 late restaurants owing between $3 and $500 each.

"It's a compliance issue," said Horbal. "We want everyone to pay their proper share of taxes, no more, no less."

Normally, to collect back taxes, localities say they use a range of tactics: notices, liens, collection agents, having a sheriff's deputy take money from the cash register, or going to court. Now they can have the ABC board take the alcohol license. Richmond officials say they've already been using the tactic, as the ABC board has already been able to revoke permits for restaurants that don't meet financial obligations, including taxes. But Henrico says it won't take any restaurants' ABC license.

Said Henrico's Director of Finance Eugene Walter, "I believe that is a sledgehammer approach. If we petition the ABC board to revoke someone's ABC license, basically you're shutting down that restaurant."

However, Chesterfield and Hanover officials say, if other collection efforts fail, they will start pulling restaurants' ABC licenses, to try to avoid going to court.

Said Horbal, "Those are usually lengthy and expensive to go through. If we can avoid the court action, that's much better."

It's a serious consideration for restaurants and bars where alcohol sales make up anywhere from twenty-five to more than seventy-five percent of their income.

Restaurants owing taxes can avoid having their ABC license revoked if they are contesting the taxes or have entered into a payment plan. The ABC license can be restored after the restaurant pays the taxes.