By Tim Krohn
MANKATO — Being in business for yourself is tough in any economy. But Dave Norris, owner of The Buzz hair salon and bar in River Hills Mall, said the recession has added a whole new layer of anxiety.
Mankato is poised to suspend the liquor license for The Buzz because the business has spend months on a state tax delinquency list, a list occupied by a number of area businesses.
“About a year-and-a-half ago, the bar business just shut off,” Norris said. “We’re in a long-term lease, which is quite costly, so we’re kind of at a crossroads.”
Norris said the salon side of the business is doing well and he’s considering expanding the salon into the bar space.
“But it’s tough to even borrow money, now,” Norris said.
He said he and minority-owner partners are looking at alternatives and are hoping to pay off their back taxes to head off a license suspension and keep the bar going.
“We’ve been in business five years. It’s insanely tough to do,” Norris said.
The delinquent tax list The Buzz is on, is a tool the Minnesota Revenue Department uses to prod businesses with liquor licenses to become current on back taxes — be it for sales, withholding, corporate income or other taxes.
“It’s a very successful process for us. We resolve a lot of them,” said Terri Steenblock, director of the Revenue Department’s Collections Division.
In the past four months, the state has collected $7.3 million in back taxes and penalties through the program.
On any given day, the Liquor Tax Delinquency list contains about 150 businesses that are delinquent in taxes and who hold a liquor license.
The fact the businesses hold a liquor license gives the state an added tool to prod them to make tax payments. Under state law, no liquor wholesaler or distributor is allowed to deliver alcohol to any business on the delinquency list.
“They can continue to operate their business; they just can’t get new product,” Steenblock said. “We like to work with them.”
She said liquor wholesalers check the delinquency list, which is updated daily, to see which businesses they can’t distribute to.
If the business is on the list for a few months, the state can order a local government to suspend the business’ liquor license, which prevents them from selling alcohol. That’s the case with The Buzz, which has been on the list since June. Mankato is set to suspend the license, said City Clerk Cheryl Lindquist.
“We only get involved once they (the state) notify us that there’s some action we have to take. In the case of The Buzz, the state notified us that we have to suspend it unless they pay (the back taxes) by Dec. 17,” Lindquist said.
Steenblock said the state tries to allow businesses to continue operating for a time until they can get their taxes paid. “If you pull the license, it’s the last resort.”
She said they look at each case individually — seeing how cooperative the owner is in paying the back taxes and what the dollar amount of the tax is — before deciding whether to suspend their liquor license.
Other area businesses on the current delinquency list, and the date they were listed, include: The Bear’s Den, Elysian (July); Coachlight Inn Supper Club, Le Sueur (June); Hazzard bar, Mankato (September).
Even the Minnesota Renaissance Festival landed on the delinquency list last month.
Some other area bars and restaurants were recently removed from the list after paying their taxes. The complete list can be found at www.taxes.state.mn.us — then type in “liquor tax delinquencies” in the search bar to find the page.
