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Nutter goes after top-50 business-tax delinquents
Mayor Nutter released the names of the city's top-50 business-tax delinquents yesterday, hoping to shame them into paying the $27 million they owe.
And if shame is not enough, the sheriff's department will begin seizing assets, Nutter said.
"We are sending the sheriff out to soon come and get our stuff," the mayor said at a City Hall news conference.
He added: "If you live in Philadelphia, work in Philadelphia, do business in Philadelphia . . . but you are not paying your taxes in return, we will go after you."
Among the biggest tax delinquents, according to the city, are former restaurateur Neil Stein, who was jailed for 10 months for tax evasion and owes $1.3 million, and T. Milton Street Sr., the older brother of former Mayor John F. Street, who is serving a 30-month prison term for failing to pay federal taxes on nearly $3 million in income. He owes $383,000.
The No. 1 deadbeat, with a debt of $2.4 million, is the Nelson Medical Group, which no longer exists.
The stepped-up effort to collect back taxes is one of several initiatives by the administration as it seeks to generate revenue to help close a gaping five-year budget hole of $1 billion.
"Some people have not been doing their part. They have not been sharing the load," Nutter said. "As of today, that kind of practice stops."
By targeting companies that owe the city $50,000 or more in business taxes, the administration said yesterday it hoped to generate an extra $4 million a year, money that would be shared by the Solicitor's Office and the Revenue Department.
The effort will also be ongoing; the delinquent tax list will be updated quarterly.
Recovering the money might not come easy, or quickly.
"There was a time when my businesses did owe taxes," said Stein, who at one time owned Philadelphia landmarks such as Avenue B, Striped Bass and Fish Market. But that's no longer true, he said. "There's no outstanding judgment against me. I did prison time, and all the taxes that had to be paid over the years were paid," he said.
Another delinquent business, GoInternet.net Inc. of Old City, closed in 2004 - three years before one of its officers, Neal Saferstein, went to prison for an online scheme in which customers were charged an extra $29.95 a month for Internet service they did not know about or request.
In addition, phone numbers for several companies on the list - including Alliance Electric Inc., which owes $891,000, and Davis Lamp & Shade Inc., which owes $792,000 - were disconnected or out of service. For others, no information could immediately be found.
Though some businesses no longer exist, the city said it would seek to recover the tax money from business officers or partners, saying that such individuals were personally liable under the Philadelphia tax code.
"What we eventually collect is always, of course, another story," Nutter said.
With this effort under way, the city expects shortly to direct the Sheriff's Office to begin seizing and selling assets of individual businesses.
The Sheriff's Office has undertaken similar steps before - going after perhaps one or two businesses a week - but never on such a grand scale, said Edward Chew, director of legal services for the office.
Nutter said the city would seek to revoke the business license of any company not in compliance.
All taxes are at least 90 days past due - although some businesses, Nutter said, have owed taxes for 15 years or more.
