The city of Brookhaven has sent letters to some restaurants throughout the city where alcohol is served, claiming the businesses have not been paying their full share of liquor excise taxes. After two months, however, no further money has been collected by the city as business owners continue to dispute some of the amounts.
In December, the city sent out the letters to 13 venues claiming they owed more in liquor excise taxes than what had been paid between 2016 and 2018. The letters asked the business owners to pay the stated amount in their letters within 10 days.
But all businesses are disputing the amounts and the city is working closely to gather their cost and distribution data to determine if the city might revise the amounts owed, according to Steve Chapman, the city’s assistant manager and chief financial officer.
“It’s an ongoing process,” he said.
Letters sent and the amount the city says the businesses owe:
■ Rusty Nail – $5,609.93
■ Villa Christina – $9,024.22
■ Pancho’s Mexican Restaurant – $16,745.80
■ Red Pepper Taqueria – $4,448.48
■ Medusa Lounge – $32,240.29
■ El Porto Mexican Restaurant – $11,793.66
■ Josephine Lounge – $48,334.92
■ Kaleidoscope Bistro Pub – $9,069.69
■ Hudson Grille – $12,723. 64
■ Pink Pony – $80,237.72
■ The Righteous Room – $7,604.12
■ Verde Taqueria – $11,439.88
■ XS Lounge – $18,443.88
Liquor distributors report to the city how many liters they deliver to businesses each month, Chapman said. The businesses also report monthly how much alcohol they sold on premises.
The city then last year conducted an audit of all businesses that sell booze by hiring a consulting firm to search online information of these businesses, such as their websites and menus, to compile average costs per drink, he said.
Using that information, the city determined a total amount of taxes owed and then measured against what had been paid. The result was these 13 businesses did not pay as much as the city believes they owe, he said.
“We looked at how much was delivered versus how much they claimed they sold … and we did the math,” he said.
Jeff Landau, CEO of Hudson Grille in Atlanta, which manages the Brookhaven store, said his company believe the city is wrong in that it owes nearly $13,000 in excise taxes. He said the city used a $9 average cocktail price to determine taxes owed, but most drinks are actually sold in the $2, $3 and $5 range.
“That $9 skewed it tremendously in a different direction,” he said.
The Pink Pony strip club off Buford Highway owes the most of any business at more than $80,000 between 2016 and 2018, according to Chapman.
The Pink Pony disputes the amount, said CFO Dennis Williams.
“We have paid our excise tax and are appealing their notice and in discussions with the city on this matter,” he said in a written statement.
“The city of Brookhaven Finance Department has been very open-minded and they have reviewed our point of sales [and] accounting structure for distilled spirits. The city of Brookhaven Finance Department is considering a compromised amount or dismissing the amount owed.”
Chapman said there is not the ability to resolve disputes with any business, there is the possibility of going to the city’s Alcohol Board. He said the city is giving the businesses “as much time as they need” to submit information on how they came up with the taxes they paid.
“But we are not saying they don’t owe additional taxes,” Chapman added. “We have not found any business yet that completed their reporting 100 percent accurately.”