State shames businesses late on taxes

Associated Press and Herald staff

Hundreds of Washington businesses are so far behind in their taxes that the state publishes their debts to try to shame them into paying.

The Department of Revenue’s "Public List of Delinquent Taxpayers" includes a wide range of businesses that collectively owe more than $26 million in back sales or business and occupation taxes.

Some are paying down their debts. Others have gone bankrupt and vanished.

The list includes between 500 and 600 delinquents at any given time, including 28 Snohomish County businesses as of this week.

The Snohomish County resident who ranks highest, at 12th overall in Western Washington, is Randy J. Payne of Everett, owner of Payne Construction. According to the list, he owes $242,122 in back taxes.

Right behind him is Larry L. Goffinet of Snohomish, listed as the owner of Goffinet Construction. He owes $237,643, according to the state, which also mentions that Goffinet’s contractor’s license was revoked in November.

Both Payne and Goffinet did not respond Monday to calls from The Herald.

Mike Gowrylow, spokesman for the Department of Revenue, calls the list "the electronic stockade." The state began publishing it in 2001 as a tool for education and enforcement.

"It’s kind of last-ditch effort to shame these people into paying," Gowrylow said. "Somebody wouldn’t be on this list if they were making a good-faith effort to pay their taxes."

Typically, Washington collects about 97 percent of its projected revenue without difficulty. Aggressive measures such as garnishing wages and seizing bank accounts recover most of the remainder, leaving about one-quarter of 1 percent.

Of the agency’s 954 employees, 402 work in the compliance and audit divisions, trying to recover money owed to the state. The recently adopted state budget adds about 50 new employees to enforcement efforts.

"We do everything we possibly can to get the money," Gowrylow said. "But in some cases there is no money. Hope springs eternal, but these are hardcore cases."

Some business owners file for bankruptcy and melt from view, leaving a trail of court filings, disconnected phone numbers and outdated addresses.

Others remain, but refuse to pay. Contractor Alice K. Money of Buckley ranks 49th on the Western Washington list. Her company, North American Power and Control Corp., has owed the state $91,449 since October 2000.

She blamed her debts on excessive taxes, and refused to say more.

"It’s just overtaxation with the state," she said. "They’re just taxing the little man."

Some business owners look at their debts and see the ruins of dreams.

"Usually when I talk about my business being gone, I’m crying," said Yun Yi, former owner of the Westwood Inn Hotel in Hoquiam. Since May 1998, she and her husband, Chong Man Yi, have owed the state $206,937.

Yi said the emergence of newer hotels in the Ocean Shores area gradually drained her business in the late 1990s.

"We were not cheating, we were not stealing," Yi said. "We were doing as much as we could to try to keep the business."

Businesses don’t reach the list until the state exhausts every other means to collect the debt, Gowrylow said. Then the Department of Revenue sends a warning letter to the business owner, files a warrant in the county Superior Court where the business or the owner resides — and adds a name to the stockade, which is updated every month.

Home builder Jim Hopkins of Graham owes the state $757,373, and his name appeared on the list in December 2001. He blames the debt on an accountant’s mistake and the state’s failure to clarify nuances of tax law.

"We screwed up, and they screwed up," Hopkins said. "We’re negotiating with the state for a settlement."

Despite his circumstances, Hopkins doesn’t complain about his stint in the stockade.

"Obviously, it’s embarrassing," he said. "But I can’t really fault the state."