Type to search

Government

Treasury may still collect from bankrupt businesses

Treasury has been cracking down on businesses that fail to remit sales and use tax revenue. (Credit: © Mauricio Pascual)

Treasury has been cracking down on businesses that fail to remit sales and use tax revenue. (Credit: © Mauricio Pascual)

The offensive launched by the Puerto Rico Treasury Department in November to crack down on retailers that collected sales and use tax revenue, but failed to remit it to the agency has unleashed a string of bankruptcy filings by those businesses, which appear to have turned to the court for protection.

Among them are:

  • The Arecibo Lighthouse amusement park, which owed about $80,000 in unremitted tax revenue;
  • Valcor/Samcor windows and doors supplier, with more than $849,000 in different debts with the agency;
  • La Patisserie restaurant, which listed more than $898,000 in taxes owed;
  • Vaca Brava restaurant in Old San Juan, which filed for Chapter 11 protection and unsuccessfully sought a temporary restraining order against the agency for revoking its liquor license as a result of its debt;
  • José Enrique restaurant in Santurce, which also got its liquor license revoked for owing some $450,000 in payroll and other taxes;

However, when a business that is embargoed by the Treasury Department opts to file for bankruptcy protection, it still has the obligation to pay its debt, agency Spokeswoman Maru Quintero said.

“Under that procedure, the debts have a range of priority in which they will be paid. In this respect, the classification of debts in favor of the Treasury has a range of high priority compared to other obligations. Therefore, Treasury can expect to collect such debts under the procedure established by bankruptcy law,” she said.

In an effort to shore up revenue for the agency, Treasury began intervening with businesses violating the local Internal Revenue Service code, looking to collect millions in outstanding balances.

Aside from paying their old debts, commercial taxpayers that turned to the court for protection as a result of the agency’s actions will still have to fulfill their obligations prospectively, “otherwise jeopardize any benefits that the law provides them,” she said.

The bankruptcy procedure does not interfere with other actions that Treasury can take as per the Internal Revenue Code to punish those who have failed to comply with the obligation to remit sales and use tax payments, and any other withholding that taxpayers must submit by law, Quintero said.

Author Details
Author Details
Business reporter with 30 years of experience writing for weekly and daily newspapers, as well as trade publications in Puerto Rico. My list of former employers includes Caribbean Business, The San Juan Star, and the Puerto Rico Daily Sun, among others. My areas of expertise include telecommunications, technology, retail, agriculture, tourism, banking and most other segments of Puerto Rico’s economy.
Tags:

Leave a Comment

Your email address will not be published. Required fields are marked *