Friday, May 23, 2008
Papa Keno’s Pizzeria, 1035 Massachusetts St., closed its Lawrence and Overland Park restaurants Wednesday morning when the Kansas Department of Revenue executed warrants for nonpayment of state taxes. Papa Keno’s owes the state more than $170,000, according to tax warrants filed by Douglas and Johnson counties.
The tax debt is in the name of Papa Keno’s sole owner, Gregory Keenan. Keenan owes more $84,520.95 in sales tax from a 2005 warrant. He owes $74,194.28 in sales tax and $11,704.75 in withholding tax on the most recent warrant. The 2005 case resulted in the closing of two Papa Keno’s stores in Colorado.
Papa Keno’s Pizzeria, 1035 Massachusetts St., was forced to close its Lawrence and Overland Park restaurants Wednesday morning when the Kansas Department of Revenue seized the properties for nonpayment of state taxes.
The department confiscated all known bank accounts, on-site cash and property from the businesses. Signs reading “Seized” hung on the front and rear entrances of the Lawrence store.
“We never like to do seizures," said Freda Warfield, Kansas Department of Revenue spokeswoman. “They’re always a last resort.”
The money owed to the state was from sales and withholding taxes – money normally set aside from customers’ purchases and employees’ wages.
Warfield said that customers who went into Papa Keno’s paid a sales tax for pizza they bought. She said they trusted the business would pay the sales tax to the state, but the business didn’t.
“Employees trust that the withholding tax that is withheld from their paycheck is being remitted to the state of Kansas,” Warfield said. “In this case, that didn’t happen.”
Warfield said that the department made numerous phone calls and sent out several letters indicating it would take legal action. The Kansas Department of Revenue’s standard practice is to seize assets after several in-person attempts to collect the funds. Warfield said Papa Keno’s could recoup its losses by simply agreeing to a payment plan and paying its taxes.
Maxwell Mehlstaub, Shawnee junior and former Papa Keno’s employee, said he was not surprised by the store’s tax woes. He said hour totals were incorrect, the business gave random pay decreases and paychecks bounced.
The seized assets will be sold at a public auction to help recoup the money owed by Papa Keno’s.
The departure of Papa Keno’s, which has been in downtown Lawrence since 1990, could give nearby pizzerias a bigger slice of the pizza business pie. Not including Papa Keno’s, Lawrence.com lists 27 pizza shops in Lawrence, seven of which are in the downtown area.
“We could probably get some of their runoff business,” said Josh Reese, manager of Rudy’s Pizzeria, 704 Massachusetts Street. “People that were regulars at Papa Keno’s and now don’t have a gourmet pizza place might look for other choices. I’m sure places like Ingredient or Pizza Hut could even benefit.”
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Comments
Papa Keno's closes its doors
Good riddance. Similar pizza only better and less expensive is just over the bridge.
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