DOWNTOWN — There’s a trio of former Santa Monica businesses that are on a list of the state’s most wanted, accused not of committing heinous crimes but rather skirting hundreds of thousands of dollars in tax payments.
The California Board of Equalization announced recently it added 19 new businesses to its list of the largest 250 tax delinquents who owe more than $100,000, including the 17th Street Cafe Inc., which until earlier this year operated a small restaurant at 1610 Montana Ave. in Santa Monica, accruing a debt of approximately $640,696.
It joins the former Santa Monica Mitsubishi, which owes nearly $1 million, and USA Sports Photography, whose debt totals more than $673,000.
The board has updated the list quarterly since first compiling it in early 2007 after a new state law mandating the public disclosure went into effect. Approximately 460 businesses have been added to the list since.
“It did result in some people coming forward who didn’t want to have the shame of having their names on the release,” Anita Gore, spokeswoman for the Board of Equalization, said. “They have made payments toward the liability.”
The 17th Street Cafe in March was transformed into the 17th Street Cafe and Bakery under its new owner, Beverly Bagel Inc., which is not responsible for the debt, Lenny Rosenberg, a partner, said.
“They’re not here because they did not pay their bills,” Rosenberg said. “I came in and bought the store after the corporation was defunct.”
Both the Santa Monica Mitsubishi and USA Sports Photography, which was located at 1948 14th St., have also since gone out of business. Mitsubishi ceased its business license with City Hall for its dealership at 1501 Santa Monica Blvd. in December 2004 and January 2007 for its auto repair shop on Pico Boulevard. USA Sports Photography operated for seven years in the city before closing July 2002, Pamela McGarvey, the acting revenue manager for City Hall, said.
Businesses that have petitioned for bankruptcy may not be able to eliminate their tax debt as a result, but could see collection actions, including liens and levies, suspended for a period of time while the case is pending.
The board can set up an installment system for businesses that have difficulty paying off their bills. If the debt is not paid, the state has the authority to take collection actions, including levying bank accounts, wages and other income. The state could also place a lien on properties.
About 20 taxpayers, representing debt of $18 million, have fulfilled their debt since the program was launched, 14 of which were through an installment payment system. A half-dozen made their payments in full.
The 19 new businesses added have debt totaling more than $22 million in sales taxes owed.
Gore said that when businesses struggle, they tend to prioritize payments, keeping vendors and salaries at the top to keep operations afloat.
“A lot of times it’s people who have just fallen into bad times,” she said. “That is why we try to work with taxpayers any way we can to help them pay their obligations.”