The city of Brookhaven officials are cracking down on businesses who they say fail to accurately pay liquor taxes.
Officials in the DeKalb County city claim several restaurants, bars and lounges owe thousands more in taxes than what they initially paid.
Brookhaven sent letters to 13 businesses in December stating that an analysis indicated they sold more liquor than they had reported on their taxes. Almost three months later, the businesses have disputed what the city required, Brookhaven spokesman Burke Brennan said. He said seven have communicated with the city and reached a new agreement on what they owe.
The city has still not reached an agreement with six of the establishments, including the popular Pink Pony strip club in south Brookhaven, Brennan said. Those companies could face a “final notice” on the issue.
The city claims the Pink Pony owes more than $80,200, the most of any business on the list.
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Brookhaven said it did an excise tax audit by contacting liquor distributors and analyzing purchases from January 2016 to March 2018. It also analyzed the percentage of alcoholic beverages on the menu and the average price of a drink, according to the letters.
Dennis Williams, the vice president and chief financial officer of the company that owns the Pink Pony, said he disagrees with the calculation Brookhaven used to come up with the $80,200 figure. Williams said the city is trying to charge based on the total cost of a drink, not the amount of liquor served. For example, a mixed drink like a vodka-soda includes mostly soda and less liquor.
“Our excise tax is applied to just the distilled spirit cost,” Williams said. “Juice and mix and soda isn’t liquor. So why would you pay an excise tax on that?”
He also said Brookhaven did not account for liquor that was delivered but was not sold to customers because it spilled, broke or remained in inventory.
Williams added that he has sat down with city officials and is trying to achieve a compromise.
“We’ll work it out … We’ve got a good relationship with the city and we want to maintain it,” he said. “The city’s been good to the Pink Pony.”
The other establishments that have not reached an agreement with the city include Josephine Lounge, Medusa Lounge, XS Lounge and Hudson Grille, Brennan said. Representatives for those businesses could not be reached for comment Tuesday.
The Rusty Nail Pub, Villa Christina, Pancho’s Mexican Restaurant and Cantina, El Potro Mexican Restaurant, Kaleidoscope Bistro and Pub, The Righteous Room and Verde Taqueria also owe the city taxes but have agreed to pay an addition negotiated amount.
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