Toby Keith's I Love This Bar & Grill Hit With Tax Warrant

Apr 17 2014, 6:26pm CDT | by

Toby Keith's I Love This Bar & Grill Hit With Tax Warrant
Photo Credit: Forbes Business

In 2003, country singer Toby Keith went all the way to #1 with his mega-hit, “I Love This Bar.” The incredible popularity of the song inspired a chain of restaurants called Toby Keith’s I Love This Bar & Grill with fifteen locations across the country including a spot in Keith’s hometown of Oklahoma City, Oklahoma.

Today, it appears that at least one location may be singing a different sort of tune: Toby Keith’s I Love This Bar & Grill in Destiny USA is said to owe more than $189,000 in back taxes. Destiny USA is the sixth largest shopping center in the nation and the largest in the state of New York. The shopping center attracts more than 20 million visitors each year, which makes it an attractive spot for a franchise like Toby Keith’s.

However, while it appeared that the restaurant was doing well (this according to Destiny USA’s general manager, Rob Schoeneck), the state of New York has a different take. The state has filed a tax warrant Toby Keith’s, claiming the location owes $189,392.17 in back taxes.

The source of those back taxes: unpaid sales taxes. Sales taxes are collected and treated a little differently from regular business income taxes. Sales taxes are not paid out of the business but rather are collected from customers to be turned over to the taxing authorities. Since sales taxes are collected from customers and held by the business, they’re often referred to as “trust fund taxes.”

Trust fund taxes also include other taxes collected from a third party like employee withholding. In many cases, the liability for trust fund taxes can be transferred personally to business owners or those in charge of financial operations. Additionally, trust fund taxes like sales taxes are not usually dischargeable or forgiven, even if a business is struggling.

Sales taxes can be tricky for businesses to maneuver since the cash is paid over directly but doesn’t belong to the business. When businesses find themselves in financial difficulty, it can be tempting to dip into trust fund tax accounts, like sales tax accounts, to pay bills to keep the lights on. It’s easy to think that the money can be replaced before it’s time to pay up: when that doesn’t happen, the business finds itself in tax trouble.

That tax trouble can result in seizures and forfeitures. In this case, the State of New York has filed a tax warrant against Toby Keith’s which allows it to satisfy the tax liability by levying the business’ bank accounts. The state could also seize the business to satisfy the debt: for now, however, the restaurant remains open.

This isn’t the first time that Toby Keith’s restaurant chain has drawn scrutiny for reasons other than its food: Toby Keith’s I Love This Bar & Grill in Woodbridge, Virginia made news for instituting a no-guns policy, even though Virginia allows firearms in bars and restaurants (although carrying a concealed weapon while under the influence of alcohol is prohibited in the Commonwealth).

It’s worth noting that Toby Keith (of whom, full disclosure, I’m a big fan) doesn’t actually own the restaurants that bear his name: he has a licensing agreement that allows the restaurants to use his name.

Want more taxgirl goodness? Pick your poison: receive posts by email, follow me on twitter (@taxgirl), hang out with me on Facebook or check out my YouTube channel. If you want to keep an eye on documents I’ve posted, check out my profile on Scribd. And finally, you can subscribe to my podcast on the site or via iTunes (it’s free).

 
 

Don't miss ...

 

<a href="/latest_stories/all/all/30" rel="author">Forbes</a>
Forbes is among the most trusted resources for the world's business and investment leaders, providing them the uncompromising commentary, concise analysis, relevant tools and real-time reporting they need to succeed at work, profit from investing and have fun with the rewards of winning.

 

blog comments powered by Disqus

Latest stories

World Bank pledges more funds for Ebola flight in West Africa
Accra, Oct 30 (IANS) The World Bank announced Thursday an additional $100-million support package in its Ebola response activities for three West African countries ravaged by the epidemic.
 
 
Did you sleep well? This device will show
Tokyo, Oct 30 (IANS/EFE) Japanese video game company Nintendo Thursday announced it will develop a device to track and improve the quality of sleep, the latest venture of the company to get into the "eHealth" business.
 
 
US approves first vaccine against dangerous meningitis strain
Washington, Oct 30 (IANS/EFE) The US Food and Drug Administration (FDA) has approved the first vaccine against meningitis B following outbreaks in several college campuses over the past year.
 
 
Novel treatments for autism on horizon
Washington, Oct 30 (IANS) Rare mutations in more than 100 genes affect networks in the brain that result in autism, showed two major genetic studies on the syndrome led by scientists at the University of California.
 
 
 

Latest from the Network

UEFA rejects Sporting's request for replay of Schalke match
Lisbon, Oct 30 (IANS) Union of European Football Associations (UEFA) has rejected Sporting Clube de Portugal's request for a replay of their Champions League match with Germany's Schalke 04 due to alleged refereeing...
Read more on Sport Balla
 
US approves first vaccine against dangerous meningitis strain
Washington, Oct 30 (IANS/EFE) The US Food and Drug Administration (FDA) has approved the first vaccine against meningitis B following outbreaks in several college campuses over the past year. The vaccine Trumenba, to...
Read more on Business Balla
 
US condemns attack on refugee camp by Syrian military
Washington, Oct 30 (IANS/EFE) The US has condemned an attack by Syrian armed forces on a camp for displaced people in the northeastern region of Idlib in which 10 people died and dozens were injured. The attack was...
Read more on Politics Balla
 
Kenyan marathoner Makau ready to prove critics wrong
Nairobi, Oct 30 (IANS) Former world marathon record holder Patrick Makau will be keen to silence his critics when he lines up at the Fukuoka Marathon in December. "It has been two years of frustrations. I have been in...
Read more on Sport Balla
 
Novel treatments for autism on horizon
Washington, Oct 30 (IANS) Rare mutations in more than 100 genes affect networks in the brain that result in autism, showed two major genetic studies on the syndrome led by scientists at the University of California....
Read more on Business Balla
 
Kenya's Kimetto, Kipsang battle for marathon jackpot
Nairobi, Oct 30 (IANS) Wilson Kipsang and Dennis Kimetto will battle for the $500,000 World Marathon Majors (WMM) jackpot in Sunday's New York Marathon. The two boarded the same flight from here, heading for New York...
Read more on Sport Balla
 
Market Share of iPhone 6 and iPhone 6 Plus Strenghtens Apple’s Position in the Europe
The iPhone 6 and iPhone 6 Plus are continuing to dominate the global market, as a new report reveals that the market share of the devices have been increased from the same time frame of the last year.According to Mac...
Read more on Apple Balla
 
Market Share of iPhone 6 and iPhone 6 Plus Strenghtens Apple’s Position in the Europe
The iPhone 6 and iPhone 6 Plus are continuing to dominate the global market, as a new report reveals that the market share of the devices have been increased from the same time frame of the last year.According to Mac...
Read more on Apple Balla
 
'Form CARICOM panel to solve Windies contract dispute'
Bridgetown (Barbados), Oct 30 (IANS/CMC) Caribbean island St. Vincent's Prime Minister Ralph Gonsalves has advocated the assembling of a three-member Caribbean Community (CARICOM) panel to help resolve the ongoing...
Read more on Sport Balla