One of the topics that I’d also like to talk about with respect to businesses particularly bars and restaurants is liquor license holds. In cases where you have to delinquent sales tax liability or delinquent payroll tax liability, the state can put a hold on your liquor license and prohibit the sale of alcoholic beverages. If you’ve ever run a bar or restaurant you know how critical the sale of alcoholic beverages can be to your overall growth and operations. But because it is a state issued license, the state can use the threatened hold or the actual hold of your liquor license as a means to secure enforcement.
Now, from a practical application standpoint, this is a akin to killing the goose that lays the golden eggs. If you take away the liquor or beer sales for a bar or restaurant that can be anywhere from 30% to 85% or 90% of a bar or restaurants sales. In some cases where they don’t serve food, it can be 100% of their sales. Essentially what the state can do is shut down the business through the seizure of that license. It makes liquor license holds a particularly dangerous avenue for bars and restaurants.
Always something you need to keep in the back of your mind is if your client does not remain in compliance, a relatively simple action can cause a lot of problems for your taxpayer. It’s very, very important when dealing with a liability for a bar or restaurant that you treat it very, very seriously because what’s even worse than a bank levy or a levy of the merchant accounts or anything like that for business, is actually the closure of their liquor license. It’s really, really important that you keep that in the back of your mind, that you defend your clients at all costs from the seizure of their liquor license. Otherwise, it create major problems for your client and can potentially jeopardize the health of a business.