On The Money: Tax Deadbeats
California is $19 billion in debt – in part because thousands of people either can't – or won't pay their taxes. But the uncollected money is really hurting students.
The State Board of Equalization, which collects sales taxes, has issued an updated list of the top 250 tax delinquencies in California. One of the names on that list is a Valero gas station in Tracy, where business is brisk. California Gas Station LLC, doing business as Valero, is considered one of the top tax debtors in California, owing nearly $900,000 in unpaid sales taxes, according to state records.
CBS 13 wanted to know why; On The Money paid a visit to the Valero station in Tracy, where we were told the owner was not in that day.
On The Money told the gas station attendant, "Okay, because it's $893,000. You'll give him a call?"
"He's going to call you," said the attendant.
The owner's attorney did in fact call us to say his client has reached a settlement agreement with the Board of Equalization – and has been making regular payments to satisfy the tax lien.
CBS 13 broke the story of former Jack-In-The-Box franchise owner Abe Alizadeh nearly a year ago. Alizadeh is also on the list. The Board of Equalization says he owes $1.4 million in back taxes.
By law, California must publish the list of debtors every year.
"The total for those 250 people on the list is about $333 million dollars in uncollected taxes," said Anita Gore, Deputy Director of External Affairs for the Board of Equalization.
$333 million would pay for more than 45,000 students to attend California public schools, grades K-12, according to a funding formula provided by the Department of Finance. But the $333 million is just for uncollected sales taxes.
The Franchise Tax Board (FTB) is also keeping tabs on the top 250 deadbeats – a separate list of people who fail to pay their personal income taxes.
Topping the list is former CNET founder Halsey Minor. FTB records show he owes $13 million in unpaid state income taxes. Former Baywatch actress Pamela Anderson is also reportedly on the list. Anderson owes $493,000 in back taxes according to the Franchise Tax Board.
"Currently today there's $180 million dollars represented by the top 250 debtors," said Denise Azimi, a public affairs officer with the Franchise Tax Board.
That $180 million could pay for more than 8,200 students to attend the University of California for an entire year, according to calculations provided by the Department of Finance. And while most people pay their taxes – there's still a huge tax gap – the differential between what people owe and what they pay. And in California the tax gap is $6.5 billion in personal income taxes – plus another $2 billion in sales taxes.
Add it all up ($8.5 billion) and it amounts to nearly half of California's $19 billion deficit. Both tax agencies are rigorous about tax collection. They attach bank accounts, wages and also seize properties before ultimately slapping a lien against delinquent debtors. Still, the missing money would really help now – with California on the brink of a cash crisis – and possibly just weeks away from issuing IOU's.
If you see examples of wasteful spending – send us an e-mail to onthemoney@kovr.com. You can also follow On The Money stories in progress via Twitter at twitter.com/mikeluery.
