Beloved neighborhood ice cream store Toscanini’s is back in business as of Friday, Jan. 25 after paying off part of its $167,000 tax debt and making a schedule to repay the rest. Much of the money came from donations made by loyal customers — a situation one tax official called “unusual to the point of unprecedented.”
Toscanini’s was seized on Thursday, Jan. 17 by the Massachusetts Department of Revenue because of outstanding tax debt that had accumulated since 2000. A few days after the seizure, a Toscanini’s employee created a Web log at www.savetosci.com asking for donations to help pay the tax bill; the fundraiser met its goal of $25,000 for a “down payment” by Friday, Jan. 25. On Jan. 26, the site reported that it had raised $31,406.85.
Toscanini’s made the $25,000 down payment and negotiated a repayment plan with the Department of Revenue, owner Gus Rancatore said on the Web site, and the store reopened on the afternoon of Friday, Jan. 25.
Rancatore said he was surprised by the overwhelming support he had received. “It was dumbfounding,” he said. “It was one of those freaky Internet things.” Although he said that he’s still thinking about ways to thank the contributors, his blog post announcing the fundraising success said that “we plan to post the first names of over 300 people.” Although January is traditionally a slow month for ice cream sales, business has been brisker than normal, Rancatore said.
“Our folks in collections really said that this was a first, in terms of a community fundraising drive to pay off a proportion of a tax debt,” said Robert R. Bliss, a spokesman for the Department of Revenue.
Toscanini’s failed to pay some of its taxes between 2000 and 2005 because the business was poorly organized, Rancatore told The Tech last week. In 2002, the shop was closed for one day because of approximately $76,000 of debt; at the time, Rancatore negotiated an agreement to repay the back taxes and reopen the store. But over the next six years, the debt grew, until the business was closed again.
Bliss said that the Department of Revenue seizes about 80 businesses a year. Seizure is typically the last step the department takes to recover debt, he said. After a business is seized, its possessions are auctioned off, generally raising only “pennies on the dollar” and rarely covering the business’s tax debt, he said. The Department of Revenue prefers to negotiate repayment agreements, as it did with Toscanini’s, because a running business is more likely to be able to earn income that can be used to pay off those debts. Bliss said that he could not disclose details of the agreement under which Toscanini’s is repaying its taxes and has been allowed to reopen.
Bliss said that the Department of Revenue would be closely monitoring how Toscanini’s followed its repayment plan.
“They need to make this one work,” Bliss said.