By Angie Gambill
Mountain City Mayor and business owner Kevin Parsons has been involved in an ongoing battle with the Tennessee Department of Revenue for almost four years now. The Retailer Accountability Program (RAP), a law dealing with the assessment of sales taxes owed to the state by convenience stores, went into effect in 2013. As the owner of Parsons Quickshop, Parsons is in vehement disagreement about the amount assessed as due from his store.
Parsons’ dispute with the state is based on his belief that RAP uses a faulty process to determine the amount of sales tax owed by the Quickshop. According to him, he is charged sales tax at the end of each quarter on the inventory in his store. In effect, he is paying sales tax on merchandise he has not sold. Parsons says he has unsuccessfully appealed the state’s assessment by requesting that inventory on hand be removed from the equation, but the state so far has refused to change the assessment process.
According to Parsons, the answer he has received from them is that an ongoing business should only need to purchase merchandise to replenish what is sold.
“This is absurd,” said Parsons. “Anyone with a minimal knowledge of how a business operates knows you can’t sell everything within a certain time period. Any reasonable person understands that in order to run a business you must have items for sale.” He goes on to say, “My resale certificate from the Department of Revenue (DOR) permits me to keep an unlimited amount of inventory in my store. It does not require me to pay sales tax to the state on those purchases before I sell them.”
When the convenience store owner received an assessment in the fall of last year that contained the word “fraud,” he says he had “had enough.”
“I take great offense in having that word associated with my name,” he stated. “I would never purposefully do anything that would suggest I am a fraudulent person.”
Because his appeals had been denied multiple times, his next step was to file a civil suit against the State of Tennessee in December of 2016. The suit is seeking a decision from the courts on the validity of the state requiring him to pay sales tax on items not sold. He also cites discrimination because he believes his store to be the only one in Johnson County whose assessment is determined in this way.
On January 31st of this year, the case escalated when the DOR temporarily seized his business with intention of closing it until the disputed amount was paid. Parsons stated that he believed this to be in retaliation for the lawsuit. According to him, state law restricts further collection attempts on an assessment while the case is pending in a court of law. However, Parsons had no recourse but to pay the amount in question to prevent the closure of his business. Parsons further states that he feels this was an attempt to discredit and embarrass him in the community.
“Their reasons for wanting to seize my business are beyond me unless it was an attempt to create a perception to the community that I was a criminal and cause damage to my reputation and hurt my business,” said Parsons. “Of course this embarrassed me and I know it hurt my reputation as all kinds of rumors were flying around this small town as to what was taking place. I’m sure they meant to devalue my credibility which would put less blame on them,” he added.
Parsons’ day in court is set for this Friday, March 3rd at 9 a.m. He will be representing himself as he says most attorneys tell him it’s useless to fight the state on these matters.
That would be another point the Mountain City mayor disagrees with.
“Our founding fathers would have to be appalled at such a notion.”