Douglas business owner to admit keeping collected sales taxes

The owner and operator of a Douglas bar could be going to jail for sales tax evasion.

Patrick M. Peterson of P P’s Douglas Inn was supposed to change his plea on Friday to as many as sixteen charges filed by the CBJ in March. But neither he nor his attorney attended the hearing. Since it may have been the result of a simple scheduling error, a change-of-plea has been rescheduled for later this week.

Peterson faces eight misdemeanor charges of failing to file sales tax returns and eight misdemeanor charges of failing to remit sales taxes to the City and Borough of Juneau.

Court documents allege that Peterson collected at least $34,800 in sales taxes from his patrons between October 2009 and December 2011, but he did not pass the taxes on to the CBJ as required. Essentially, it was alleged that he was pocketing the sales taxes for himself.

Since this is not the first time that Peterson has run afoul of the CBJ for not remitting sales taxes, any plea agreement negotiated with prosecutors could likely include jail time and repayment of most of the owed taxes, plus interest and penalties. The total is now up to $42,084.80. Peterson could also spend up to ten days in jail for each of the sixteen charges. CBJ attorney August Petropolis believes it is one of the more significant cases in recent memory of unremitted sales taxes.

Larry Lee Lynd, operator of Wooly Mammoth Gifts and Sourdough Larry’s, pled guilty in April on charges related to failure to remit $222,912 in sales taxes. He ultimately agreed to pay back $191,799. He was also sentenced to a suspended fine of $5,000 total and a suspended term of 180-days in jail.

Peterson was headed to trial in the case late last month.

Peterson in 2007 was convicted by a jury of not filing his sales tax returns, although his paid his debt shortly before trial started. According to archived news reports, Peterson was sentenced to community service and ordered to pay over $50,000 in penalties and interest.