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Jul 12, 2017 4:20 PMPublication: The Southampton Press

UPDATE: Publick House Will Reopen Friday Night

The Southampton Publick House was seized on Wednesday  JULIA HALSEY
Jul 14, 2017 5:12 PM

Update: Friday 5 p.m.

Southampton Publick House its set to reopen at 7 p.m. Friday, after the New York State Department of Taxation and Finance returned possession of the bar and restaurant to the owner.

Owner Donald Sullivan said before 5 p.m. that he was on his way back from the department’s office in Hauppauge, where he had just made a tax payment. Once he arrives at the Publick House, it will take a half hour to get ready to welcome patrons, he said, and going forward, the business will remain open as usual.

Update: Thursday 1 p.m.

Southampton Publick House owner Donald Sullivan said Thursday that setbacks from the restaurant’s transition from its original location on Bowden Square to Jobs Lane, infrastructure repairs, a slow winter and village sidewalk and parking lot construction limiting access to the restaurant entrances are to blame for the business’s seven tax warrants totaling more than $111,000.

With each of these setbacks adding up over time, he said that the village’s construction of the parking lot near the restaurant is what took the biggest toll on his business.

“We were essentially closed for three weeks. People couldn’t get in or get out. That was where we fell behind with New York State. I was trying to keep people employed and keep the lights on,” Mr. Sullivan said.

When approached by the New York State Department of Taxation and Finance in mid-June, Mr. Sullivan said they were very generous and cooperative with putting him on a payment plan, but when it came time to pay the department on Friday, July 7, he couldn’t due to losing $15,000 of business during a power outage on the Fourth of July that shut down The Publick House from 11:30 a.m. to 4 p.m.

Mr. Sullivan said he made the payment on the following Tuesday, July 11, but the department told him it was too late. However, he has plans to repay the debt, which is now $111,744.69 as of Wednesday morning, according to Department of Taxation and Finance spokesman James Gazzale, and reopen the restaurant.

“We will reopen in the next few days and we will take care of the debt,” Mr. Sullivan assured.

He said that looking back, he should have closed down the business briefly to handle the tax issues, but that it was more important to keep Publick House doors open. “We were open for 20 years continually and that was important for me,” he said.

Update: 5 p.m.

The New York State Department of Taxation and Finance seized the Southampton Publick House on Wednesday due to seven tax warrants totaling more than $100,000 in outstanding taxes, according to a department spokesman.

Six warrants concern outstanding sales tax, while the seventh concerns outstanding withholding tax, which is the income tax that an employer withholds from employees’ paychecks and remits to the state, explained the spokesman, James Gazzale.

The oldest warrant dates back to March 2016 and the most recent warrant is from May of this year, Mr. Gazzale said.

“Long before we seize a business, we’re in communication with the business owner letting them know there is an outstanding tax debt and we work with them to try to find a way to resolve it,” he said. “Seizing a business is always a last resort.”

The current warranted balance is $111,708.12, according to Mr. Gazzale, who said that the keys to a business are returned to an owner when the department is confident that the owner is acting in good faith to satisfy the tax debt. “In general, after seizing a business, we continue to have communication with the business owner in hopes of having a mutually beneficial way to resolve the debt,” he said.

Original:

The Southampton Publick House on Jobs Lane in Southampton Village was seized on Wednesday by the New York State Department of Taxation and Finance.

According to a notice posted outside the business by officials with the department, the business was seized for failure to comply with sales tax laws.

The Department of Taxation and Finance notice states that the department was “levying the right, title and interest of McSully Enterprises, Inc./Southampton Publick House and all personal property located on the premises of the business.”

Further, the notice said the department would sell the restaurant “as directed by law unless the warrant is otherwise satisfied.”

As the property is now in possession of New York State, any person attempting to interfere with or enter the property could be prosecuted, according to the notice.

Owner Donald Sullivan and the State Department of Taxation and Finance did not immediately reply for comment.

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Wow what a scam..living beyond their financial means..
By watchdog1 (386), Southampton on Jul 12, 17 4:32 PM
Its hardly a scam.
By lursagirl (148), southampton on Jul 12, 17 9:58 PM
Not the states fault the restaurant deducted employees witholding, and sales tax they collected and pocketed it. Real stupid
By chief1 (2291), southampton on Jul 12, 17 5:13 PM
1 member liked this comment
I think it is very unfair to make the statement "...scam ....... living beyond their financial means". Seems to me that a small business that has been in the community for a while was trying to keep up with the economy and hit hard times. With taxes rising, employers being told what they have to pay employees, food expenses rising every week ...... and menus cannot be changed accordingly or customers get upset .... plus PSEG.
Let us all be more understanding and hope the establishment can ...more
By leo (11), hampton Bays on Jul 12, 17 5:27 PM
The Sullivans have always been community minded business owners and are always willing to donate or help others. I think a GoFundMe page or a collection should be set up to help Sully get his business back. The employees lost their jobs! Some have been with them for years! The $100k is nothing compared to what they have donated over the years. Any help with this would be appreciated.
By Linda Goldsmith (8), Hampton Bays on Jul 12, 17 6:35 PM
3 members liked this comment
This comment has been removed because it is a duplicate, off-topic or contains inappropriate content.
By patrick61 (16), Hampton Bays on Jul 12, 17 11:12 PM
The Sullivans have always been community minded business owners and are always willing to donate or help others. I think a GoFundMe page or a collection should be set up to help Sully get his business back. The employees lost their jobs! Some have been with them for years! The $100k is nothing compared to what they have donated over the years. Any help with this would be appreciated.
By Linda Goldsmith (8), Hampton Bays on Jul 12, 17 6:35 PM
And I was going to drop by there tonight before the concert...Best way for the State to get paid the tax is to let them operate, especially at this time of year. Do they have a go fund me page? We can all advance them funds now and then they discount us drinks in the future..Win win.:)
By Toma Noku (559), Southampton on Jul 12, 17 6:39 PM
2 members liked this comment
Anyone operating a restaurant on the East End can understand how this happens. When things start to slide downhill it's hard to catch up with the Hampton's high fixed and labor costs. No coincidence that at least 5 new restaurants are owned by billionaires.
By harbor (286), East Hampton on Jul 12, 17 7:04 PM
Are you people for real?? Operate within your means, pay your employees, bills, suppliers, taxes, etc. Stop with the BS. what a dis-service to your customers, employees, and taxpaying peers. I do. You should also.
By realistic (408), westhampton on Jul 12, 17 7:51 PM
1 member liked this comment
What's the name of your local business so I can never patronize it?
By harbor (286), East Hampton on Jul 12, 17 7:57 PM
Hahahahahahahahahahaha! Idiots! Nice scam, keep em shut down till they're paid up. They've been in business for years and should know how this works and should know better..
By G (284), Southampton on Jul 12, 17 9:08 PM
Sure, this will pay the bills.

Whose impeccable sense of timing and logic at the IRS does this **** move belong to? Perchance to dream that it's a prank to raise money for charity, and everyone is getting a few paid days off...
By Mr. Z (9145), North Sea on Jul 12, 17 9:20 PM
it happens.....shame, i like that place
By gloverdt (17), westhampton beach on Jul 12, 17 9:24 PM
A Go Fund Me page? Seriously? They collected the state sales tax once already from every customer. They just didn't send it in.

They had plenty of warning and didn't do anything about it. Maybe if I break the law and don't pay my taxes, I can get others to pay it for me. SMH
By itsamazing (202), Southampton on Jul 12, 17 9:58 PM
Nothing wrong with suggesting a solution to help out a local business and its employees during a rough patch--albeit a tongue in cheek suggestion. I'll take compassion over" whatever" any day.
By Toma Noku (559), Southampton on Jul 13, 17 2:40 PM
I guess they should've charged a higher cover on "Ladies Night".
By Mouthampton (331), Southampton on Jul 12, 17 10:41 PM
I miss the old Driver's Seat...
By Funbeer (204), Southampton on Jul 13, 17 4:10 AM
1 member liked this comment
Hoping for a quick resolution for one of the top places to chill out in the Hamptons, and allowing their outstanding staff a speedy return to their employment.
By allenfein (51), Southampton on Jul 13, 17 9:00 AM
2 members liked this comment
The Sullivans are some of the best people I know. Never kick a man when he is down. I've been in business for over 40 years, through good times and bad times. I know what it is like to claw and scrape to keep the doors open and to get behind like this. After a client stiffed us for huge money, my son died in a car accident, he was 21. We had an angel in an IRS agent who came through the door, he had a badge on with the power to padlock our doors, instead he prayed with us. The business turned around. ...more
By Wainscott217 (3), Wainscott on Jul 13, 17 9:03 AM
We will add all you sell outs to the list of people that prefer the IRS over their fellow human beings.
By even flow (419), East Hampton on Jul 13, 17 10:54 AM
1 member liked this comment
Ii wish the owners the best of luck,if you want to have a restaurant at this worlds best location. Have the financial backing passing the hat around will not cut it again do not live beyond your means
By watchdog1 (386), Southampton on Jul 13, 17 4:42 PM
That sounds a bit self-righteous. I'm sure you don't know all the facts. Don't judge lest you also be judged for how you judge, you will also be judged. When that day comes you will remember these words.
By Wainscott217 (3), Wainscott on Jul 13, 17 6:27 PM
2 members liked this comment
Here's the deal, you charge $1 plus sales tax, that sales tax goes to the state. You pay an employee $100 minus withholding, that withholding goes to the state. Its pretty simple math / bookkeeping. If you are not sending that money to the state on a regular basis than someone is skimming money.
By Rich Morey (288), East Hampton on Jul 13, 17 10:27 PM
2 members liked this comment
just wondering......if you could not send in the with held taxes, supposedly lost business due to sidewalk and parking lot repairs, and supposedly lost $15,000.00 on fourth of july due to a power outage. then how the hell are you going to now pay back $111,000.00 in with held taxes after being closed?????
By MACK (50), Southampton on Jul 14, 17 8:31 AM
This comment has been removed because it is a duplicate, off-topic or contains inappropriate content.
By SlimeAlive (549), Southampton on Jul 14, 17 8:40 AM
This is an unfortunate situation brought on by a tough winter and spring in our local economy. It can be very difficult for businesses to make ends meet when there isn't enough business to go around. Public House has been a staple in our community for many years and has been a strong supporter whenever they are asked to contribute. Now that summer has come, I hope his luck changes and money starts flowing again. I am a business owner and am all to familiar with these challenges. Anyone who can comment ...more
By Corwin1879 (27), Southampton on Jul 14, 17 11:17 AM
I am slightly confused on why people would offer to pay or suggest a GoFundme when the money owed was already paid by us the patrons..........they collect the tax prior to paying the State - I understand hard times and higher costs but this is business 101 - Not for the private sector to solve
By lmahanna (15), Hampton Bays on Jul 14, 17 12:12 PM
1 member liked this comment
If people want to be charitable, why criticize? I am more than confused why it would bother you if someone wanted to help some else out?
By metsfan2 (125), southampton on Jul 14, 17 4:05 PM
1 member liked this comment
We criticize people for being dumb all the time. Why should this be different?
By dnice (1929), Hampton Bays on Jul 15, 17 4:04 PM
Nasty pro-IRS arm chair quarterbacks must be sad the the place was open last night.

Always root for your fellow citizens and against the most despicable branch of our government- unless of course you have sold your soul to Satan. At that point we understand your sympathy for the sick financial hitmen of the IRS.
By SlimeAlive (549), Southampton on Jul 15, 17 6:29 AM
Um it was not the IRS. It was the NY State dept of Taxation and Finance.
By fishy (89), East Hampton on Jul 17, 17 11:30 AM
As someone else already pointed out, patrons paid the tax when they paid their bill. It was up to them to pay the state. They didn't do that. That's their fault. As anybody who is in the business as long as they have should know, the State always gets their money. I wish them the best, but this was pure stupidity.
By johnj (650), Westhampton on Jul 17, 17 11:41 AM
Perhaps part of the financial hardship has to do with the Publick House's recent purchase of Crooked Ladder Brewing in Riverhead? There was an article about that pending purchase right here in this paper back in March.
By Arnold Timer (262), Sag Harbor on Jul 20, 17 10:09 AM
Figured I'd mention that any money received through GoFundMe is taxable.

Seemed relevant.

I also don't like excuses. Make a mistake? Own it. As a business owner, collecting sales tax and not remitting it would not even be an option. Sell the car, mortgage the house. Whatever. Welcome to being a business owner.

Poor businessmen make poor decisions.
By diy_guy (101), Southampton on Jul 20, 17 11:37 AM
Donald Sullivan is a kind hard working generous man. He has always donated to many local charities in our community. I wish him the best.
By artistcarolboye (1), Hampton Bays on Jul 21, 17 1:34 PM
2 members liked this comment
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