Tax officials in Hawaii met with swap meet, craft fair, and farmers market vendors this week after a month of raids that have imposed thousands of dollars in fines and created uncertainty for many sellers.
The Hawaii Department of Taxation says that its new Special Enforcement Unit has been continuing an ongoing tradition of audits and has added a new fine-imposition aspect to swap meet and market visits as part of an effort to make sure that all businesses follow the law.
“We’ve always gone out to swap meets and audited them,” says Department of Taxation acting deputy director Ronald Randall. “This unit was formed, and because of the fines, I think it became more obvious — because now we issue fines, whereas in the past we just went to these vendors and audited them. What we are doing is nothing new. It’s just that we have a new enforcement unit that can go out and issue fines if sellers are not in compliance.”
According to news reports and Randall, the spark that prompted the recent controversy was an incident at the Kailua Open Market last month, when the new Special Enforcement Unit visited for the first time. “The thing that triggered all of this was caused by some buyers and not the vendors. The vendors have all been very helpful and cooperative with us,” recounts Randall. “The buyers had cornered a couple of our people, and they called the police because of the potential violence.” One shopper was cited for $2,000 for interfering with a government official. “That was the first time we went out to that event,” he adds, “and we went out there because there was a complaint that there were cash transactions going on.”
Since then, emotions have been running high, according to the Star Advertiser. One report quoted a vendor who had been at the Kailua Market:
Sakhone and Griffin Twigg, owners of West Valley Farms in Waianae, were issued a $670 citation at the Kailua Open Market on Oct. 28, allegedly for failing to produce records of transactions for their produce sales that day. The fine essentially wiped out two weeks of profits they normally would earn at back-to-back markets in Waimanalo, Kailua, and Kaneohe every Thursday morning. For holiday craft sellers confronted by the new Special Enforcement Unit agents, “they’re going to have no clue,” Sakhone Twigg said. “This is going to be huge.”
In another, somewhat ironic, result, the 36th Mayor’s Annual Craft & Country Fair at the Blaisdell Exhibition Hall has been cancelled. According to the Star Advertiser, “The city Parks Department Monday announced that the fair at the Blaisdell Exhibition Hall had been called off. Randy Yasuhara, a recreation specialist for the department, said the decision was made because the state is more strictly enforcing laws on vendor sales, and that vendors without general excise tax licenses could be liable for fines.”
Since then, however, the mayor has reinstated his eponymous event. Mayor Peter Carlisle has stepped up and declared that the event will take place sometime before the end of the year — late this afternoon KHON reported that the event will take place Dec. 4.
Trying to act as a mediator, the Parks Department of the City and County of Honolulu invited the Department of Taxation and vendors to meet yesterday at Makiki District Park. At the informational get-together, tax officials tried to quell rumors and present some facts. “It went very well. The vendors were very receptive, and we are working with them to resolve some of their issues,” says Randall. “It seems that there are a lot of rumors going around that we’re requiring cash registers, and that’s not true.” He added that vendors just need receipts and inventory records, like any other business. “Every transaction needs a receipt. If the customer declines the receipt, then the vendor has to log the sale.”
“We’re not out there to issue fines,” he says. “What we’re trying to do is to get the people to be in compliance.” Randall told the Star Advertiser that the agents have so far issued 88 citations totaling about $36,000 worth of fines.
But mending relations with the vendor community may take more time. Josh Welch, a farmers market vendor, told KITV 4 News, “I want to know how much did Walmart and McDonalds pay in taxes in the state of Hawaii last year compared to what you could possibly hope to imagine to get out of these working-class people doing the best in this economy to support themselves and their families.”
Photo credits, with thanks: KHON.