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Long-Overdue Restaurants Paying Off Tax Debts

by ARLnow.com — June 3, 2011 at 9:52 am 2,785 34 Comments

Good news for county coffers — some restaurant owners have been repaying their long-overdue tax debts.

A new list of meals tax delinquencies from the Arlington County Treasurer’s Office shows that certain restaurants have reduced or even eliminated their debts. Here are the highlights from the list, as of May 31.

  • Chef Roberto Donna continues to make small court-ordered payments on his $150,715.96 debt from the failed Bebo Trattoria
  • The Front Page in Ballston (4201 Wilson Blvd) has repaid most of the $46,531.82 it owed in February — it now owes only $2,935.59
  • Extra Virgin in Shirlington (4053 Campbell Avenue), which still owes the most of any restaurant that’s currently in business, reduced its debt from $71,171.50 to $65,098.93
  • Kora Restaurant in Crystal City (2250 Crystal Drive) has reduced its debt from $25,908.06 to $21,400.40
  • In one not-so-bright spot, the Quiznos in Virginia Square (3434 Washington Blvd) has seen its debt increase from $31,429.93 to $36,526.74

In addition to the Virginia Square location, four other Quiznos franchises owe the county money. That makes Quiznos the most delinquent chain in Arlington (by number of restaurants). The debts include:

  • Quiznos (1215 S. Clark Street) in Crystal City — $9,596.13
  • Quiznos (3000 Washington Blvd) in Clarendon, now defunct — $6,069.57
  • Quiznos (2231 Crystal Drive) in Crystal City — $5,421.32
  • Quiznos (1555 Wilson Blvd) in Rosslyn — $2,519.40

The 4 percent county meals tax is collected on all prepared foods and beverages sold in Arlington. This tax is passed directly on to the consumers in the form of a tax charge on the bill. Sometimes restaurants simply pocket the cash rather than remit it to the county, leading to delinquencies and debt.

  • LP

    Any news on Gua Rapo in Courthouse? And where can we view this info. so we don’t have to anxiously await ARLNow updating us?

    Thanks!

    • http://www.arlnow.com ARLnow.com

      Guarapo is no longer on the list, so it appears they paid their debt. This latest list is not on the county’s web site yet.

      • LP

        Thanks for the follow-up.

  • CW

    Thanks for the update in light of the recent discussion of this on multiple threads.

    Looks like Quiznos on Wash. Blvd. and Extra Virgin are both in pretty dire financial straits. Not surprising really – bad location for Quiznos and Extra Virgin, well, it’s just somewhat subpar in my mind.

  • Joe

    Kudos ArlNow on the journalism you practiced here. One way or another, you obtained the updated list, perused it, and extracted interesting items.

    In particular, interesting that Front Page has paid off most of its debt now, although it still is quite delinquent at being $2,900+ in arrears.

    When restaurants hold back on submitting the meals tax to the County, that is stealing. If they make arrangements up-front with the County for a deferred schedule, that is one thing (and should be noted in the delinquency spreadsheet). But to use meals tax collections as a de facto interest free loan is simply wrong. We should take this into account in terms of where we decide to dine, hold our fundraisers (that bring in customers), etc.

  • 5555624

    Why not just shut them down? Make the limit $1,000 and once you owe more htna that, you get shut down.

    With all the Quiznos locations on the list, I was surprised to see the Ballston locaiton didn’t make it.

    • CW

      Ballston probably gets enough lunch traffic to actually be profitable.

      I am curious about the epidemic of Quiznos locations on the list. I wonder if it is that 1) people just don’t like eating at Quiznos so they’re all losing money, 2) a bunch of them are owned by the same person, or 3) Quiznos doesn’t educate its franchisees properly on taxation.

      • Tabby

        I thought that Wash Blvd Quiznos became the Ganges Grill and then that shut.

        They’re franchised, I believe, and I think the quality took a total nosedive. I loved them when they first opened.

        • Tabby

          Sorry, never mind re: that Quiznos. It’s the defunct one.

          The one downtown by Farragut West–also gone.

          • CW

            The Wash. Blvd. Quiznos owner is a nice guy. I went there a bunch earlier this year in light of some 2-for-1 coupons they sent out. But the location just doesn’t seem to do it for them. It seems they cater mostly to the law school, which makes sense, but I’m not sure how steady or voluminous that business is.

    • NOVApologist

      Shutting down the restaurant means no future sales tax collection. It could also mean the restaurant files bankruptcy and doesn’t even pay its back taxes. The whole process of shutting down a restaurant and seeking back claims for shuttered or bankrupt companies would cost the county a lot more than a couple thousand dollars. Not to mention making restaurants reluctant to locate in the county.

      • John Fontain

        “Not to mention making restaurants reluctant to locate in the county.”

        Businesses may be reluctant to locate in Arlington if they know they have to follow the law? Why would we want the law violators in the first place?

        What they should do is have significant disincentives kick in when the businesses’ unpaid taxes go above some small level. That will deter delinquencies and alleviate the “if we penalize them we surely won’t collect all the huge amounts due” mentality the county could conceivably take.

        • NOVApologist

          Shutting down a restaurant, even temporarily, is a kiss of death.

          If you were thinking of opening a restaurant and had your choice of location A, B, or C, and you knew the penalty for tax delinquency was a penalty and fine in locations A and C, but in location B you would be shut down, you would most likely choose A or C.

          The restaurant business is a tough gig with very high failure rates. Restaurants often pay vendors and – clearly – taxes late just to keep their heads above water. I am not saying anyone should condone that, but if Arlington were to make their penalties seriously harsher than other areas, I am just pointing out that it would be a disincentive. If you are in favor of that disincentive because you don’t want tax scofflaws in Arlington, that’s totally cool.

        • SoCo Resident

          Just wave the annual Arlington household income in front them, the greatly reduced rents versus the Didtrict, the almost zero crime, the quality workforce, etc., etc. and they’ll come; Arlington has NOTHING to worry about. So, we collect our meal tax, but you can make BIG BUCKS in Arlington!

  • ArlingtonCountyTaxpayer

    The financial health of these restaurants has NOTHING to do with them paying their taxes.

    This is money that they COLLECT on behalf of Arlington County and the KEEP IT. It is stealing from the customers as much as it is stealing from Arlington.

    I don’t understand why Frank O’Leary is letting people do this to him.

    • CW

      But wouldn’t simple logic suggest that a restaurant in need of money would be less incentivized to pass said collected funds on to the county, and to use it for operational expenses instead?

    • James

      It is indeed stealing, although I think it’s a safe assumption to make that the reason most restaurants are tax delinquent is because they are stealing this money with the intent of using it to pay other, more pressing bills that are past due (employee paychecks, utlity bills, and their suppliers) because their business is not healthy enough to generate the cashflow needed to keep them afloat.

      If they are paid up on all other accounts, they are likely to be paid up in their taxes.

  • ARLDiner

    What happened to Tandori Nights? I know they owed a bit of money last time?

  • John Fontain

    I’d like to know what, if any, penalties exist for delinquent accounts? Do they have to pay the county interest?

    • http://www.arlnow.com ARLnow.com

      I do believe interest is assessed.

  • ArlingtonLawyer

    The last time I was at Roberto Donna’s Bepo Trattoria, he was charging $1.50 if you wanted good olive oil as compared to what they put on the table. That was a sign that he was in trouble. . .which of course I took to mean the guy was just being cheap. I’m glad he’s making good on his debt.

  • TMP

    Given that they should be retaining the taxes that they’ve collected from customers, there is no excuse for this. It’s criminal (or at least should be) and they should be prosecuted.

  • John Fontain

    I can guarantee that these restaurants are none too pleased to see their names in lights on this website, so Arlnow’s reporting on this matter is providing a real benefit to the county by encouraging these businesses to pay up. I know that I am inclined to avoid giving delinquent restaurants my business.

  • SoCo Resident

    Roberto Donna, late of Bebo and now of Galileo III in DC, is a James Beard Award-winning chef and now forever a felony embezzler. If he does not pay back Arlington County, then he will have to serve his 5-year sentence.

    Monthly, he signed the County meal tax reports; nightly. he paid his waiters out of the cash register. Arlington County had a hard time convincing the Commonwealth’s Attorney to prosecute this, so don’t blame just the County Treasurer.

    But, the Donna case victory is certainly significant and should send a clear message to restaurant owners: wanna be a felon, then don’t pay your meals tax!

    See there are felons in restaurants too!!!

  • Ali

    The Crystal Drive Quiznos has been shuttered for at least a few weeks now.

    • Michael H.

      It was probably tough for that place to compete with the more popular Chipotle’s a few feet away.

  • BallstonDweller

    Glad to see this story–hope this shames some of them into paying up.
    I used to visit Front Page once in a while, but have avoided it since I learned about the tax delinquency.

  • Tabby

    what about P Brennans?

  • John Andre

    These high restaurant taxes and the Virginia sales tax on food[!] have continually been a sore spot for me.

    The big problem: The restaurants sure as heck are NOT delinquent in collecting them…why do they hold onto the money & not remit it back to the County!!!? The Republicans speak with forked tongue on taxes…soak it good to us fixed income retirees, then let businesses keep the proceeds!!!

    • http://www.arlnow.com/2011/03/28/zone-parking-becomes-more-restrictive-near-clarendon/?utm_source=ARLnow. Frank Lyon

      Not sure how the Republicans figure into this. Self-congratulating democrats have been in charge of arlington — and budgets and tax rates – for as long as I can remember.

  • ArlForester

    I don’t know why all restaurants don’t just do what a particular crappy late night pizza place does and just don’t ring up half of the orders. That way you not only don’t have to pay Arlington, you can skirt your obligations to the feds too.

  • Bluemont Residant

    What happened to Murky Coffee? They were also vary high on the former lists of tax thieves.

    • Brandon C

      Since Nick Cho brought his signature anti-iced-espresso junkpunching to the West Coast, we haven’t really heard about him. I call shenanigans. We must keep tabs on the tax delinquency of all including Junkpunchers.

      If you haven no idea what I’m talking about, Google it.

      • http://blacknell.net/dynamic MB

        I’d pay into a fund to have Arlington Co. go sue to attach his earnings there. What a dick.

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