Dec 4, 2009 4:27 pm US/Pacific
On The Money: California's Top Tax Deadbeats
SACRAMENTO (CBS13) ―
You can still catch the commercials on the Internet for Auburn Nissan, but the former car dealership once known for its high volume ads is long gone. Tumbleweeds are all that's left of the Auburn Nissan store on Highway 49. The dealership owes more than one million dollars in back taxes, according to the Board of Equalization.
And in Shingle Springs, the Chrysler Plymouth Dodge Lincoln Mercury Dealership once owned by Brusa/Lynch Enterprises, has also gone belly up, while still owing $704,983 to the state in unpaid sales taxes. Both of these defunct dealers are on the Board's list of the 250 biggest tax deadbeats in California.
"Sales tax revenue that is represented on this list is $288 million," said Anita Gore of the Board of Equalization. The BOE is required by law to publish a quarterly list of the top tax debtors. Since the "public outing" program began in 2007, BOE has collected more than $3.4 million from delinquent businesses that are behind in their sales taxes.
Many of the names on the list of debtors are former car dealers that have closed their doors, making the prospect of the state recovering any money very unlikely.
California's car culture has a flat tire, with one dealership shutting down every three days.
"Last year it was a record year," said Peter Welch of the Sacramento based California New Car Dealers Association. "We had 142 dealers go out of business," Welch told CBS 13.
The shutdowns put thousands of people in the unemployment lines, with millions of dollars lost in uncollected sales tax revenue. And so far this year, another 108 car dealerships have closed down. Those dealerships that remain open fear they may sell fewer than one million cars statewide, for the first time in decades.
"The last time we sold under a million units was 1975," Welch declared.
The drop in car sales puts pressure on California's government, that's expected to do more, with less.
"That's less revenue that we have to be able to spend on education, or health care or public safety," noted H.D. Palmer, a spokesman for the Department of Finance.
California's car woes may get even worse next year, when 65 GM dealers around the state are slated to close their doors in October, as part of a so-called "wind down" agreement with General Motors, according to Peter Welch.
The bottom line is there are more tough times ahead for California's already fragile economy.
If you'd like to check out the list of California's top tax debtors for yourself, just click
here.
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