Tax delinquent businesses are good leads. Post 42

Lawmakers likely to remove bed-tax ‘cloak’

Business First of Buffalo July 23, 2007       by James Fink

When members of the Erie County Legislature convene for their biweekly meeting July 26, they are expected to vote on a local law that will allow the county to release the name of any hotel operator who falls behind on their bed tax payments.

…one hotel operator owed cash-starved Erie County $500,000 in unpaid bed tax dollars. At the time Poloncarz couldn’t release the name of the operator, citing a 1974 clause in the bed tax legislation that offered a cloak to anyone…that was in arrears on bed tax payments.

The bed tax, a levy which is charged to any hotel or motel with more than 30 rooms, is used to underwrite the operations of the Buffalo Niagara Convention & Visitors Bureau and the Buffalo Niagara Convention Center.

The issue, according to lawmakers, is to remove the cloak of secrecy and to publicly identify any hotel operator who falls behind in annual bed tax payments.

“Having the name and identification of any hotel operator and making it public is an essential enforcement tool,” said Legislator Cynthia Locklear, D-West Seneca.

“I’m glad it has only been hotel operator, given the fiscal structure of the county,”Iannello said.

See full article: http://buffalo.bizjournals.com/buffalo/stories/2007/07/23/daily12.html?jst=b_ln_hl

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Coach Mitch’s REFLECTIONS

The county governments will pursue commercial tax delinquents with more vigor than residential tax delinquents.

This should not be news. Commercial operations will bring in greater tax amounts and it has the added benefit of being a “business” and not a person. We all know that “businesses” are wealthy and that they can afford to pay (said with sarcasm). However, it is the proverbial “little old lady” that tax officials and politicians are careful to give some consideration.

Many northeast states are in a very bad financial position. They have an aging population, high welfare benefits, old equipment, large bureaucracies and a voting population whose mindset wants the benefits without the high taxes. Property taxes are very high. NY is the highest taxed state in the nation. Counties are very aggressive at collecting taxes of all types.

This high tax, high spend attitude by bureaucrats and elected officials indicates why tax collections are a serious matter. The only thing that matters is that you legally owe the money and that they will get it, if not from you, then from the property, via tax deed auction.

No thought is given to the idea that the law is wrong,or that the collections are harsh treatment.

Look at the title of the news story; it speaks to the idea that a law is being changed to better collect taxes versus that the taxes owed are too high and that high taxes might be a reason that the entire county is in serious financial difficulty. No thought is given to the idea that the convention center should not have been built unless it could operate in the black; nor that there should be no need for the bed tax to be in existence because the convention center should not be subsidized.

Tax delinquent businesses are good leads.

Businesses are particularly vulnerable. In addition to the property, water, sewer and town taxes, businesses owe sales taxes, unemployment insurance taxes, Medicaid taxes, workers compensation insurance taxes plus various and sundry local taxes or regulations aimed at business because “they can afford it.”

When you investigate a commercial location that is tax delinquent, be aware that the business is probably in trouble. The first thing that is paid are the bills to lease equipment. Without equipment, you cannot run a business. After that, the employees and suppliers are paid.

The taxes are paid after the businesses other direct expenses are paid. If there is not enough for the taxes, then eventually it will catch up and the property will be at risk.

You must be ready to jump into the breach.

Others are not trained to look at the delinquent taxes as a way to determine if a business is solid. You however, are trained with a different mentality. You are trained to seek out the items that others ignore or simply do not know about.

See Coach Mitch’s “Ridiculously Simple System…” ™ for details.

Good luck,