Other restaurants with tax deliquency problems

Amid thousands of Iowa sales tax delinquencies, the debt generated by a group of 19 Burger Kings is a whopper.

Between June 2010 and June 2011, the Department of Revenue posted sales tax liens exceeding $1.3 million against Chicago-based MKMB Restaurant Partners LLC, which acquired the Burger King franchise in seven Iowa counties in March 2009.

Co-founder Martin L. King said the Iowa delinquency is not as big as it appears and that it will be paid off by April 2012.

Chief Financial Officer Sue Connolly said the $1.3 million in liens is almost double the amount MKMB failed to remit and is almost double the amount it is required to repay. King said the original debt was in the range of $600,000 to $800,000.

Revenue officials admit liens usually reflect an inflated estimate of the tax due. The amount sought can be negotiated; the total paid by an individual business seldom is disclosed.

"It's not one that any of us could be proud of in this position, but we have forthrightly entered into an installment agreement, and we are more than 80 percent done paying what's owed," said King, a lawyer who also serves as chairman of the Rainbow PUSH Coalition founded by the Rev. Jesse Jackson.

On Sept. 17, 2010, Linn County recorded the release of four state sales tax liens that had been generated by delinquencies dating as far back as December 1999 against a Cedar Rapids enterprise called 1895 Ellis Inc.

The liens were released more than eight years after the dissolution of the corporation against which they were assigned. Restaurants that had operated at 1895 Ellis Blvd. under a variety of names and owners were long closed. The building was ruined in the 2008 flood and sat condemned.

In response to a public records request from The Gazette, the Department of Revenue provided copies of records revealing it had settled the liens with a balance of $27,882 for $100 - less than one-half of 1 percent of the amount due.

The state settled with Ronald and Wayne Myers, the brothers behind 1895 Ellis Inc. and some of the restaurants that had done business at the site. Installment payments had been made for years.

- Steven R. Reed/The Gazette