A business owing the state of Kansas more than $163,000 in taxes is going to auction — but the items up for bid are raising some eyebrows among the state’s lawmakers.
The state originally raided five shops, all of which were owned by United Outlets LLC, property of Larry Minkoff. Minkoff was guilty of nonpayment of income, withholding and sales taxes, according to officials.
So what’s all the fuss? Minkoff’s shops, located in four different cities, sold adult entertainment products.
After negotiating with Minkoff, the state agreed to return the merchandise under the condition that he would auction it off to pay back the state.
The issue caused quite a stir among the state’s legislators, especially among Kansas’s Democrats. They accused the Republican-led state Senate and Governor Sam Brownback of hypocrisy after their recent criticism of Brownback’s Democratic challenger Paul Davis.
The controversy stems from a 1998 incident, where Davis was present at a strip club during a drug raid.
State Senate Minority Leader Anthony Hensley released a statement saying, “Brownback is so desperate to fill the massive hole in the state budget caused by his reckless income tax cuts that the state of Kansas is now in the porn business.” The statement also took the governor to task for his attacks on Davis.
Brownback’s administration released a statement pointing out that this was just business as usual for the state.
“While we do not agree with the type of business involved here,” the statement said, “it was nonetheless a legal business that was closed due to failure to pay taxes.”
The auction closed just last week, and it offered thousands of items for sale in about 400 lots. The items included DVDs, clothing, adult games, and other products; one lot contained 50 “premium” sex toys and, additionally, a teddy bear.
Jeannine Koranda, spokeswoman for the Kansas revenue department, commented that the difference between this auction and previous ones was the “titillation factor.” “This is an unusual lot of items,” she said.
The state revenue department goes through several steps, said Koranda, before closing a business. The state issues warrants on debt if other collection methods have been unsuccessful, such as letters, telephone calls, notifications of impending legal action, tax liens filed with the district court, bank levies and on-site till taps.
In order to recover collateral from these types of business, the state will confiscate relics, bank accounts and any on-site cash, according to Koranda.