The city seized business owner's 2002 Bentley, which will be auctioned off to pay his tax bill
If you owe the city back taxes, pay up or you may be walking to work.
View full sizeThe bar owner's 2002 Bentley will be auctioned off to pay part of his tax bill.That was the message New Orleans officials had Wednesday for business owners who owe delinquent sales taxes.
One French Quarter bar owner didn't heed the warning and the city seized his 2002 Bentley, a brand of luxury automobiles whose prices start at about $200,000 and go up -- way up -- from there. The car will be auctioned off to pay part of the owner's tax bill.
Chief Administrative Officer Andy Kopplin told the City Council's Budget Committee that the city did not file any lawsuits for delinquent taxes in 2008, 2009 or the first four months of 2010, when Ray Nagin was mayor.
When Mayor Mitch Landrieu's administration took office in May, he said, it was determined to pursue a "much more aggressive course of action," and the first lawsuit it filed for delinquent taxes resulted in a court judgment against the bar owner for more than $400,000.
The owner agreed to pay the bill in installments, but he failed to keep up the payments, so the city took the Bentley, which the businessman had put up as collateral because he couldn't meet the city's demand for a 25 percent down payment on the bill.
"That is funnier than fiction," Councilwoman Stacy Head said.
The owner was not identified during the meeting. Court documents released later by the city list Yousef Salem as one of several owners of the Old Absinthe House, Mango Mango and other French Quarter bars and note that he personally guaranteed the tax liability would be paid.
On a broader front, Chief Financial Officer Norman Foster said stepped-up tax auditing and enforcement activity by the city brought in $768,000 in the first quarter of 2011.
The Bureau of Revenue has hired six auditors to join the four already on the staff, and it will soon be adding two more, Foster said. In addition, the number of revenue field agents, who visit businesses suspected of not properly reporting their sales or remitting their taxes, has jumped from four to 10.
The field agents contacted 257 businesses in the first quarter, compared with 75 in the first quarter of 2010, and the number of administrative subpoenas jumped from 21 to 129, Foster said.
Deputy City Attorney Bob Ellis, who handled the lawsuit against the French Quarter bar owners, said 89 matters involving an estimated $4.5 million in unpaid taxes have been referred to an enforcement team of city lawyers and Bureau of Revenue employees.
More than 60 petitions demanding more than $3 million have been filed, Ellis said, and 11 cases have been resolved or are near resolution. Together those cases have resulted in payment to the city of $370,000, with several hundred thousand dollars more expected, he said.
Foster said more aggressive efforts to get businesses to renew their occupational licenses early in the year boosted first-quarter license collections from $5.5 million in 2010 to $7 million this year, although that does not necessarily mean collections will be greater at the end of the year.
Foster also noted that four sales are planned during the rest of 2011 of properties whose owners are delinquent in paying property taxes from 2010 and earlier years.
Bruce Eggler can be reached at beggler@timespicayune.com or 504.826.3320.