On Monday, officials from the New York State Department of Taxation and Finance (DFT) "affected a seizure" on the Lighthouse Deli located at 107 Canal Street in Ellenville. Officers from the Ellenville Police Department and a locksmith accompanied the DTF agents that served the seizure.

According to Michael Bucci, a spokesman for the DTF, the owners of the deli are the subject of two tax warrants, both of which were filed with the Ulster County Clerk on October 17, 2007. At that time, the deli's owners owed $16,723.96 in sales tax and an additional $797.12 in withholding or payroll taxes.

According to Bucci, this is not the first time that the Lighthouse Deli has been the subject of inquiries by the DTF. Bucci cited similar circumstances going back to 2004 and 2005 when the business owed the state more than $20,000.

Bucci referred to the seizure process as a method of last resort. If the deli's owners are not able to pay a significant portion of the owed taxes the DTF will perform an inventory of all of the merchandise connected to the business and arrange an auction in an attempt to collect the missing funds. That process generally takes 3 to 5 weeks after the initial seizure and Bucci says that the DTF remains open to negotiate with the owners throughout the entire process.

"Negotiations are ongoing [with the business owners] up until that gavel hits. They can offer payment, or work out a payment plan, at any time during that period. They can even bid on their own property at auction."

Bucci says that this kind of situation happens across the state "on a daily basis," and says that restaurants are one of the more susceptible businesses.

"Bars and restaurants often work on pretty thin margins. Sometimes, they see that money sitting there when they fall behind [with bills] and they decide to borrow into it and have a tough time paying it back."

Attempts to reach the deli's owners by the Ellenville Journal were unsuccessful.

Anatomy Of A Seizure

When a retail business opens it must receive a "certificate of authority" from New York State. The certificate empowers the individual business to act as the state's agent in collecting sales tax.

Depending on the volume the business does, it will have to file a report with the state's tax office on a weekly, monthly or quarterly basis. Under normal circumstances, the report is accompanied by the proper amount of sales tax that is owed to the state. Sometimes, a business will file without including the proper amount or will simply fail to file. At that point, the state's tax office "creates an assessment."

DTF representatives follow up "pretty quickly," says Bucci. The agency will start with a phone call to assess the circumstances. If there is no response to the phone call, a field agent is dispatched in an attempt to set up a payment plan.

"This is not meant to be confrontational. We try to be as cordial as possible," says Bucci.

If those efforts prove unsuccessful, Bucci says that the DTF will then file a tax warrant and start to consider a seizure.

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