The Virginia Department of Taxation is using a new technique for getting businesses to pay back taxes: public embarrassment.
The department’s Web site has begun to list businesses that have not paid back taxes, interest or penalties as an inexpensive tool to try to collect the money, said Joel Davison, a spokesman for the department.
“We are trying to give them every opportunity to pay up before taking more drastic measures, which are usually more expensive,” such as padlocking the business or court action, Davison said.
The “Delinquent Debtors” list is expected to grow as files are reviewed, and individuals may see their names posted soon, he said.
Seventeen states and the District have similar programs. Maryland lists the top 50 debtors in the state, whether businesses or individuals, said Kevin Kane, a spokesman for Comptroller William Donald Schaefer.
The state has collected about $16.1 million since the program’s inception in 2000, he said. Prior to 2000, there was no program to collect back taxes, Kane said.
“The most effective part of this program is we exhaust every opportunity to bring people into compliance before their name goes on the list. And when people realize they are going to be on the list, they quickly come into compliance,” Kane said.
Virginia sent letters to businesses before they were posted. Three businesses either paid or entered a payment plan for their back taxes, Davison said.
“I would say it is an embarrassment, but there is absolutely nothing we could have done at the time,” said Mike Wines, superintendent of Chantilly Excavating and Paving, one of 11 businesses on Virginia’s “Delinquent Debtors” list.
Wines said a bad business deal, which is currently in arbitration, is why the list shows the firm owing over $25,000. He said the company has been working to pay off the debt.
“A business is a business. If you have it, you have it. … If you don’t have the ability to pay, you just don’t have it,” he said.
Virginia Department of Taxation Web site
» www.tax.virginia.gov
» All listed parties have had memorandums of liens or judgments filed against them
» Includes businesses in Danville, Lynchburg, Richmond, Newport News, Virginia Beach and more
» $463,314.19 total owed by 11 businesses currently listed
