Friday, July 31, 2009

Update on Soulard as a Tax Haven and our Apologies

Readers will remember that a recent blog posting noted that property owners of several main line bar/restaurants in Soulard were in arrears in their real estate taxes.

To recap, the owners of: (1) 1923-31 S. 12th, the location of Nadine’s Gin Joint, owe $29,560.65 for the years 06, 07 and 08; (2) 1027 Geyer, the location of The Great Grizzly Bear, owe $23,386.77 for 06, 07 and 08; (3) 2001-2003 Menard, the location of Clementine’s Bar - Oh My Darlin’ CafĂ©, owe $10,708.77 for 07 and 08, and (4) 1200-1214 Russell, the location of John D. McGurk’s Irish Pub, owe $24,191.66 for 08. This is per a check of the City of St. Louis web site at 8:45 a.m. on July 31, 2009.

That is a total of $87,847.85, penalties included.

Madame Chouteau checked the St. Louis City Revised Code Chapter 8.02: Licenses and read that: The License Collector shall not issue any merchants, manufacturers, franchise, business or occupational license or renewal thereof, to any person, partnership or corporation, or anyone who contracts for personal service to be performed by individuals within the City, which under the law the License Collector is empowered to issue, unless and until the applicant for such license produces a written statement of clearance issued jointly by the Collector of Revenue and the License Collector certifying that no current or past personal property, real estate tax, payroll tax, business license taxes and/or earnings taxes are due and payable to the City and a statement from the Director of Revenue of the State of Missouri certifying that the applicant is in possession of a retail sales license, if such a license is required.

Madame Chouteau’s interpretation of this boilerplate is that a license to do business will be granted providing that real estate property taxes, among other items, have been paid and are not past due. This sounds reasonable.

The fact that property owners on which some bars and restaurants sit in Soulard are in arrears in their property tax payments, according to City of St. Louis records, is puzzling.

Then everything was made clear, thanks to an excellent column titled "Political Eye," found on page A11 in the July 9 - 15, 2009 issue of the St. Louis American under the headline "License to do business as usual" and the subhead "Scofflaws welcome."

The column explains that Missouri Auditor Susan Montee had released the week before audits of several City of St. Louis departments, including the Office of License Collector, headed by Michael McMillan. There were some miscellaneous problems revealed by the audit, including some problems with procurement policies, etc. The column went on:

"The real eye opener in this audit report, however, is that you really don’t have to have a business license in order to do business in the city of St. Louis.

"The report notes, ‘Of the 3,208 businesses reviewed, 700 operated without a valid business license for at least two years due to deficiencies noted during the clearance process. Of the 700 businesses noted above, 235 operated without a valid business license for at least three years.’

"That’s fully one-quarter of the businesses reviewed!

"McMillan’s response is typical in local politics. If it’s my fault (and I’m not saying it is), then everybody else is doing it.

"‘As indicated, this has been a long standing problem. It is a City and State problem, not just a License Collector’s Office problem,’ he writes.

"‘Businesses in this category have paid for their business licenses. The non-compliant status usually relates to compliance deficiencies with other city departments such as the Collector of Revenue, the Building Division and the Health Department or to the State of Missouri for sales tax.’

"McMillan goes on to admit that the City is so desperate for tax revenue it is willing to waive the license requirement rather than close down scofflaws.

"The report states, ‘According to the License Collectors office, this problem has continued to exist partly because the City has been hesitant to close non-compliant businesses when it is already difficult to keep existing businesses and bring new businesses into the city.’"

So there you have it. Madame Chouteau applauds the administrators of the City of St. Louis for not enforcing their own laws in order to avoid discomforting city businesses, which apparently are in short supply. And we especially thank the St. Louis American for explaining this and making it clear. And we hope that business property owners are not deducting from their income taxes the expense of their unpaid property taxes.

And, of course, Madame Chouteau apologizes for misunderstanding the situation.


Anonymous said...

A very sad state of affairs.
A big downer, not to mention much more expensive, for those of us who play by the rules.

Anonymous said...

nothing like kicking someone when they are down. This happens and is public knowledge. I MC is devoting too much time to this