MARYSVILLE — A Marysville business owner is accused of failing to turn over more than $850,000 in sales tax that he collected from customers who used his drywall services.

Investigators say it could be one of the largest sales tax thefts on record.

Mark Standley, 53, is accused of reporting less than one half of 1 percent of the more than $10 million that he made at his Marysville-based business, Master’s Touch Drywall, between 2003 and 2008.

He also allegedly paid less than $3,000 of the more than $855,000 in sales tax that he collected from customers, according to court papers filed by the state Attorney General’s Office.

Standley was charged Monday with multiple counts of filing false tax returns and one count of first-degree theft.

The amount of money involved and the elaborate nature of the alleged scheme led prosecutors to file the case as a major economic offense, raising the possibility for extra punishment for Standley if he is convicted.

“Not only did he defraud the state but he also defrauded customers who paid their sales tax,” state Department of Revenue spokesman Mike Gowrylow said.

Customers believed those taxes were funding education and road projects, but the money was diverted to Standley’s own pockets, Gowrylow added.

“The bad part is there is a possibility he was undercutting honest contractors by underbidding jobs because he knew he wasn’t going to pay sales tax,” Gowrylow said. “That’s not fair to the honest drywallers.”

Investigators audited the business after receiving a tip, Gowrylow said.

They discovered multiple tax returns indicating no business activity when in fact the drywall company had generated substantial income, possibly even more than the $10.1 million that has been identified so far, according to court papers.

They also discovered that the business charged customers sales tax totaling $854,912 as required by law. Records indicate that the state Department of Revenue only received $2,889 of those taxes, court papers said.

Diana Hefley: 425-339-3463, hefley@heraldnet.com.