The District this week closed an Adams Morgan restaurant for its owner’s failure to pay thousands of dollars in back taxes, a piddling sum compared with the millions restaurants and bars owe across the city.
The Office of Tax and Revenue shuttered Santa Rosa Seafood, at 2224 18th St. NW, and seized its liquor license because the owner allegedly declined to pay sales, employee withholding and corporate franchise taxes. All told, Santa Rosa owed $74,000.
The restaurant shut down after ignoring several collection notices, according to OTR. Bedell Terry, chief of the agency’s collections department, said enforcement action is the last step.
“This blatant disregard for the law will not be tolerated, and violators will be punished to the fullest extent possible,” Sherryl Hobbs Newman, deputy chief financial officer for tax and revenue, said in a statement.
OTR named 23 businesses, generally restaurants and liquor stores, that owe back taxes totaling $6.9 million. Most no longer operate, such as Sarge’s Liquor Post, the owners of which racked up a $4.2 million tax bill that the District has failed to collect. The proprietor of Normandie Liquors on M Street Southeast incurred a $238,975 tax debt before closing a year ago.
But others remain in business. Smoothie Time near McLean Gardens owes $91,731. Multiple owners of various Subway franchises owe $199,798. And Murky Coffee on Capitol Hill owes $264,838, according to OTR.
A number of restaurants “are in the pipeline to be closed,” OTR assistant general counsel William Bowie said. But Murky Coffee owner Nick Cho hopes to pay while continuing to operate.
“We do indeed owe a significant sum of back taxes to the district, due to my general financial mismanagement as the owner of this small business,” Cho said in an e-mail. “The amount listed is not accurate and is based on assessments that have since been updated via accurate tax returns. However, the specific amounts are not, in my opinion, particularly important.”
