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Restaurant's struggles are shared by many other businesses, state says
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Published: October 22, 2008
Mooresville's upscale downtown restaurant is back in business after closing last week due to tax troubles, but officials from the North Carolina Department of Revenue (NCDOR) say Soiree's predicament is shared by an increasing number of businesses.
J.C. Raines, a representative from the NCDOR, said Tuesday that there are many more businesses, both across North Carolina and in Mooresville, that are struggling with paying their tax bills in a souring economy.
"As a trend, in downtimes, when the economy has taken a turn for the worse, then the taxes sometimes have a tendency to be put off," he said. "In general (when the economy is down), it's more difficult for businesses to stay on top not only on their taxes, but on ordinary bills."
And, said Raines, because they are typically viewed as offering a "luxury" and not a necessity, "restaurants are usually the first to suffer."
Soiree, located at East Center Avenue and Main Street since January 2006, was closed Oct. 13 by the NCDOR for failing to pay approximately $73,000 in sales taxes.
Restaurant officials announced Soiree's reopening on Friday.
"We are back open," owner Jon Spencer said in a press release. "We had been working for several months with the State of North Carolina to pay back taxes that we did not realize had not been filed properly."
Spencer said the problem would likely have been resolved with no closure at all, had it not been for the credit crunch resulting from the current economic crisis.
"The financial collapse of the past month dried up our credit line and Soiree struggled to get the financing needed to meet the State's timeline on repayment," he said. "Our financing did come through today, and the State lien has been paid in full."
Plenty of thank you's, said Spencer, should go out to Soiree's patrons for their understanding.
"I really want to thank the customers of Soiree for their patience and belief in us during this time," he said. "We are a Mooresville owned and operated business that strives to use locally grown food and participate in civic activities. We will continue on our goal of providing quality food, excellent service and a festive experience."
The state's Raines said Oct. 16 that closure is "the last thing the Department of Revenue wants to do" to any business, but that the issue was "is one of fairness" to other businesses who are paying what they owe on time.
"We're hoping that the taxpayer will pay his taxes," said Raines. "If he does, then he can open his doors right back up."
Unfortunately, said Raines, the number of businesses who pay sales tax to the state and who are encountering this same problem is on the rise. In the past year, he said, NCDOR has seen a higher than usual number of businesses facing delinquency and closure.
Although he declined to cite an exact number of businesses in North Carolina and in Mooresville dealing with this situation, Raines said the problem is widespread. "There's always going to be people who owe tax, whether it's in Mooresville or Mount Airy," he said.
What's most important, he said, is finding ways both to collect the tax that is owed to the state and to help business owners get current with the NCDOR as effectively as possible.
"The intent of the Department of Revenue is not to destitute anybody or put them out of business," he said. "The intent is to collect the taxes in a timely manner."
Still, said Raines, for business owners, sometimes paying becomes very difficult.
"When that money is not coming in the door, the owner has to make a decision of what bill he's going to pay," he said. "Owners sometimes have a tendency to put the people they don't see everyday (such as the DOR) off."
And when business owners get behind, said Raines, particularly in an economy like this one, sometimes the situation "just kind of snowballs."
Some, however, do find a resolution. Many in Mooresville are glad to see that a business like Soiree has come out on the other side of its tax problems.
Bob Amon, a longtime downtown Mooresville business owner and owner of the Rankin Building, where Soiree is located, said that, as a landlord, "I'm very, very glad that they got their problems worked out and that they are reopening."
Their recent difficulties, he said, are "a real example of the Wall Street crisis coming to Main Street."
Soiree, said Amon, is an "integral part" of downtown Mooresville. "I just can't imagine downtown without Soiree."
Kim Atkins, executive director of the Mooresville Downtown Commission, said Tuesday she is "excited" that Soiree has reopened.
"Soiree is representative of what we want our downtown to reflect: A place where people meet, visit with friends, and can connect with each other," Atkins said.
Businesses like Soiree, she said, help to promote a viable historic downtown, despite the difficult economic times.
"We want to make our downtown the center of our community again," she said.
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