Nonpayment of Sales Taxes for Angels Crossing Revealed

By Sue Moore

The village of Vicksburg has not been paying sales tax to the state of Michigan since purchasing Angels Crossing golf course in October 2009. This was revealed in a report to the village council by Village Manager Jim Mallery at its August meeting.

The amount due in back sales tax comes to $48,825.45, according to accountants from the Portage firm of Siegfried Crandall. They were called in by Mallery to review and analyze sales records since 2009. On top of that, the state could charge a penalty and fines of up to 25 percent if officials choose to do so. “None of these dollars would come out of the village’s taxpayers’ dollars,” Mallery emphasized. “It would come from cash flow at the golf course, which will indeed have an impact on the business plan for Angels Crossing and Creekside Grille.”

How could this happen, Mallery was asked. “There was not adequate review and proper implementation of systems [in either operation]. We will be reviewing the policies, procedures and most importantly the culture of practices at Angels Crossing and Creekside Grille.”

The disclosure was revealed after new Village Treasurer Michelle Morgan was asked to examine all areas involving financials at the two entities, Mallery said. “She notified me the first week of July of a potential issue involving sales tax because she found that the golf course did not have a sales tax license number filed with the state.”

Mallery then dug deeper to find out that Angels Crossing was required to pay sales tax on alcohol and food sales. The merchandise sold in the pro shop was part of Jeff Rohrstaff’s contract with the village and it was determined that he had paid the proper sales tax through his company. Other sales such as memberships and greens fees were determined to be tax exempt as the village is a 501(c)4 a nonprofit entity.

The amount owed to the state of items subject to sales tax from October 1, 2009 to September 20, 2010 was a mere $204.72 according to Siegfried Crandall’s review. But the rate escalated once alcohol was approved for sale: From October 1, 2010 to April 20, 2016, the amount owed was $28,091.36. When food was added by the opening of Creekside Grille, between May 1, 2016 and July 31, 2017 an additional $20,529.38 was owed.

The village has requested a tax identification number from the state and upon receipt of that will promptly pay the overdue amount, accompanied by a request from the village to have the penalties waived, Mallery said.

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