A tax lien was filed Wednesday against Sam's Club on Bowman Road in Little Rock, but state officials described the 2-year-old missed payment of $52,577.42 as an "oversight" and said they expect payment soon.
Money owed by Sam's Club, the warehouse retail division of Wal-Mart, relates to the state's soft drink tax. Liens are filed when a taxpayer fails to make payment after multiple attempts by the state to collect.
Deputy Department of Finance and Administration Director Tim Leathers said somehow multiple reminders, including a final notice from the state, "fell through the cracks." Once a payment is missed after the final notice, a lien is automatically filed.
"There was an oversight," Leathers said. "We expect it to be released shortly. It was clearly an oversight, no more than that. We know they're good for it."
Sam's Club, which operates 644 stores nationwide and seven in Arkansas, reported $57 billion in revenue for its most recent fiscal year. As a stand-alone company, Sam's Club would be the nation's third largest retailer.
Sam's Club spokesman Dianna Gee said the missed payment was a "processing issue."
"We deeply regret the error and are working to resolve the matter as quickly as possible," Gee said.
Because of its status as a wholesaler, Sam's Club falls under the soft drink tax law.
Arkansas charges a soft drink tax to distributors, wholesalers or manufacturers who "sell or offer syrups, simple syrups, powders or base products, or soft drinks" to retail dealers. Enacted in 1992, the soft drink tax funds are earmarked for the state's Medicaid Program Trust Fund. Over the past 10 years, the tax has generated an average of about $46 million per year.
If a taxpayer's annual liability is $20,000 or greater, the law allows for electronic payment of funds. A single 12-ounce soft drink would yield about $.02 in soda tax, according to John Theis, assistant revenue commissioner for the state.
Generally, a lien is used as notice to creditors that the state has a right to a debtor's assets until the debt is paid or the lien expires. Liens apply to real and personal property and are good for 10 years. Once the lien has expired, the state stops collection attempts but keeps a record that debts were past due.
Debtors who have had a lien filed against them are also charged annual interest of 10 percent, plus any related court costs. Sam's Club would owe about $10,511.48 in interest but is free of any obligation to the state once the outstanding debt, interest and any other fees are paid.
Both Leathers and Theis said it was out of the ordinary for Sam's Club to be in this position.
"They are always on top of everything. This is unusual for them," Theis said. "They've called us and said they had an internal issue and payment is going to be made."
Business on 10/30/2014