NORWICH – Tuesday the state carried through with its threat to close down a City of Norwich business for failing to pay sales taxes despite repeated warnings.
The Larger Furniture Warehouse was seized by the New York State Department of Taxation and Finance yesterday. According to a warrant filed with the County Clerk’s Office Aug. 13, the business owed $94,263.37 in overdue sales tax. Since that time, the state has had the option of seizing the company and its assets, but did not exercise that option until 2 p.m. yesterday.
“This is always our last resort. There are letters sent and several phone calls made in an attempt to collect. We also sent a representative to explain possible payment options and make arrangements. Finally when all these things have been exhausted, we file a tax warrant, which is basically a lien, which doesn’t mean we are going to seize, but that we have that option. At some point the decision was made that we had no other recourse and in order to protect the integrity of the system and keep the company’s debt from growing even worse, we took this action,” said Michael Bucci, spokesman for the state Department of Taxation and Finance.
Bucci said the department had received undisclosed information that led it to believe that the money owed was not likely to ever get paid in good faith.
“If you have an 8 percent sales tax in the area and a company is allowed to avoid paying its taxes, that gives it an additional 8 percent advantage against other businesses complying with the law, which is unacceptable,” said Bucci.
The business is located downtown at 33-39 N. Broad St. and has now been closed. The furniture store had been experiencing financial trouble lately and announced its pending closure a few weeks ago with a “going out of business” sale.
“I was hoping that we might have still been able to keep it going,” said partner in the business, Gerald “Jay” Smith.
Smith reported that his partner, Lawrence Kennedy, had stopped being active in the company about a month ago and he had been trying to sell as much floor stock as possible to pay the state.
Smith admitted that there was conflict between he and Kennedy over the specifics of the business, but said it was something for the lawyers to figure out. Kennedy is Smith’s father-in-law.
The owners will now have 30 days to arrange an agreement with the state. Bucci said a new “good faith agreement” would have to be made requiring around half the debt to be paid immediately. If no agreement can be established in that time period, the department will begin accessing and appraising all property owned by the business for auction. There will six days notice prior to any public auction published in The Evening Sun and the owners will have the opportunity to make arrangements with the state up until “the gavel falls,” said Bucci.