City says some businesses still owes arena tax

By:  Melina Matthes
mmatthes@klkntv.com

Restaurants, bars and hotels, and rental car businesses are required to collect an occupation from patrons. 

The city was short nearly $600,000 and officials say Channel 8's investigation persuaded over 50 business owners to go to the city finance department and pay their taxes. But some, are refusing to pay.

“It isn't that I'm rebelling against it, but it's killing us off,” says Denise Sheldon-Schrader, co-owner of Mama's Dream Bakery.

Mama's Dream Bakery and Deli is just one of seven Lincoln restaurants that still owes their share of the arena tax.  Denise Sheldon–Schrader is a co–owner at Mama's.  She says she knows they're supposed to pay the tax, but because her business isn't in the Haymarket she believes she shouldn't have to.

“I have a problem with the fact that their taxing the tax.  They say it's a fee but in all the paperwork it calls it a tax.  They want us to tax everything that we sell whether it's taxable or not and we're supposed to add that tax on after we add the regular tax so they're taxing a tax.”

Other businesses didn't pay because of a lack of notification.  However, the city says they've sent multiple letters to owners, some even hand delivered.  One business was even served a hearing affidavit by a police officer.  But, as the minutes ticked closer to the start of the hearing, only one business owner showed up.

“Business, it's been struggling a little bit and this is another burden on the business but I think we can catch up,” says Zoo Bar owner, Peter Watters.

Watters says he's going to work with the city and establish a payment plan to cross his name off the list.  But, between the other 6 businesses, $48,000 is still owed to the city.

“Up to this point in time we've had 2 or 3 show up periodically every day for the last week and have been taken off the list and that's kind of expected that they would try and take care of this before the hearing, before having the threat of having their food establishment permit suspended or revoked,” says Steve Huggenberg, Assistant City Attorney.

The city says the remaining 6 businesses have only a few days to establish a payment plan or pay the entire amount owed in full before their permit is taken away.  If the remaining businesses do not pay the tax within the next week or so, all the evidence will be presented to the mayor and he will make the final decision on whether they can stay open.