Peterson sentenced to 80 days in jail for failure to report, remit sales taxes

Douglas Inn

P P’s Douglas Inn at 3rd and D Streets in Douglas. File photo by Matt Miller/KTOO

A Douglas bar owner will have to pay $750 a month for the next seven years to pay off the sales tax that he pocketed instead of remitting it to the city.

Patrick M. Peterson, 55, will start paying it off after he spends eighty days in jail starting on January 7th. He could be assigned to a half-way house later or he could be out as soon as late February after credit for good time.

Peterson was sentenced on Friday to four charges of failing to file sales tax returns and four charges of failing to remit sales taxes. The owner of P P’s Douglas Inn entered guilty pleas to the charges in October. Eight other identical charges covering later violations were dismissed as part of an agreement with prosecutors. But he must still come up with the taxes.

Peterson must pay back $54,738.16 while he’s on probation for seven years. That amount includes penalties and late fees. He must also keep up to date on remitting the latest sales taxes.

A $1,000 fine for each of the charges was suspended. But he will have to reimburse the state $1,000 for incarceration.

City prosecutor August Petropolis said that the “business owner does not own the money” but is merely collecting it from the customer before remitting it to the municipality. What Peterson did, said Petropolis, is theft.

Peterson said he used the money to hire an attorney for a daughter who was facing an assault charge in Washington state. He also said he traveled several times to see an ailing father down south. But District Court Keith Levy did not seem very sympathetic, saying: “I see parents in court everyday who don’t steal to hire lawyers” for their children.

Judge Levy reiterated the prosecutor’s argument, saying what Peterson did was theft. He also said that he didn’t think the sentence was potentially harsh, especially after he was told of previous violations by Peterson.

Peterson’s attorney John Leque initially asked that he serve his time in two blocks so that he could attend to his business, and preferably after the holidays which are one of the busiest times of the year for his business. Eight people are reportedly employed at P P’s Douglas Inn.

Peterson said in court that he expects to catch up with taxes after receiving a $80,000 inheritance following the passing of his father.

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