Government shutdown forces closure of The Independent in Uptown

[[UPDATE: The Independent has decided to temporarily close.]]

Last night, KSTP ran a piece on the dozens of bars and restaurants that aren't allowed to buy alcohol because they're delinquent on sales tax payments, and, if the government shuts down, won't be able to rectify the situation until the government restarts. The general tone of the story, from interviews with restaurant owners, employees, and patrons, placed blame for the restaurant's woes on deadlocked legislators. Leah McLean lamented that "One popular Uptown bar may even have to close its doors if a budget deal isn't reached."

Our lawmakers can be criticized for a lot of things, but the bar regular's comment--"I hope it's not on their conscience that a lot of people are losing a lot of money"--is a little misguided. Never did the KSTP story suggest that the restaurants take responsibility for getting themselves on the list in the first place, or mention that they could have gotten off the list by simply paying their outstanding tax bill by June 28. (Obviously the restaurant business isn't easy, but how is this situation so different, than, say, not paying your electric bill?)

The Hot Dish followed up with Robyn Dwyer, director of the collection division of the Minnesota Department of Revenue, to get a more thorough explanation of the situation and find out which restaurants' taps may soon run dry.

Dwyer says the state also collects wage withholdings and such from restaurants, but that most businesses find themselves on the Liquor Posting list due to unpaid sales taxes. Tax delinquents have seen their liquor supplies cut off since 1986, legislation was enacted to give the state a little leverage in collection.

Dwyer explains that, in the case of monthly filers, all sales tax collected from customers in the previous month is due on the 20th of the following month. If the business doesn't pay, they're notified that they will be on the next posting of the list on the 15th of each month, which is distributed to all of Minnesota's liquor wholesalers and distributors letting them know they are not allowed to bring product to those bars and restaurants.

So who's on the current list?   It's downloadable here on the state's website. The first section shows businesses posted in June that are still delinquent, while the second lists delinquent businesses posted in previous months. The third section of the list includes businesses that were previously in arrears who have paid up between June 1 and the current date.

Being posted doesn't really have consequences until your liquor supply runs low, so presumably some establishments hold the sales tax they've collected from customers as long as possible, and simply pay their bill right before they need a delivery. (Not everyone on the list is a tiny mom-and-pop shop. There are some heavily managed, well-established operations such as Crave and Blue Plate, which were both posted in June but have already settled up.)

The restaurants to worry about are the ones that were posted on June 15 and haven't yet paid, or, worse, the ones posted in previous months that are still on the list. In Minneapolis, Fusion (April '11), Duplex (April '11), and True Thai (May '11) are among those, as is the restaurant visited in the KSTP story, the Independent, which has been on the list since November of last year. It either stockpiled a lot of inventory last winter, or sales have been reeeally slow, or...

Dealing with the Liquor Posting list has not been deemed a "critical service" Dwyer says, so, in the case of a shutdown, there won't be staff in place to process payments and verify that the business is in good standing. Restaurants on the list will have to wait until the government comes back to resolve the situation.

[[UPDATE: The Independent has decided to close temporarily, issuing this missive:]]

The State Govt Shut Down is TEMPORARILY causing The Indy to shut down! Long story short, our liquor license expires at midnight tonight and we can't get the renewal complete until the State re-opens and we can take care of some business matters. SO -- The Indy will close temporarily tonight at midnight and we plan a grand re-opening sometime soon. Stay tuned to FB for details -- and in the meantime -- come on out tonight and get your Indy fix! Thanks to all our loyal Indy fans for your support during this challenging time. The Indy Loves You!

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