UPDATE: The restaurant has reopened after paying about $140,000 to the state. Click here to read more.
A Waco-area restaurant seized by state officials Wednesday for owing more than $280,000 in alcohol taxes paid $80,000 toward its bar tab Thursday, but remains closed, according to the Texas Comptroller’s Office.
The manager of Mexicano Taqueria Grill & Bar at 10207 China Spring Road said the owners hope to reopen the Tex-Mex restaurant by next week, if not sooner. Christi Lugo said she has discussed the closing with businessman Mike Priest, who owns the commercial strip where the restaurant operates, but is not authorized to say more.
State officials, assisted by the Waco Police Department, visited the restaurant Wednesday morning and posted a sign that says, in part, “Warning, this property has been seized for nonpayment of taxes owed the state of Texas.” State Comptroller’s Office spokesman Kevin Lyons said the agency’s action represented a “last-resort” effort to collect $283,000 in back taxes, interest and penalties incurred between June 2014 and November 2017. The office received the $80,000 payment, but he is unaware of any formal payment plan, Lyons said Thursday.
On Wednesday, he said, “In 20 days, if an agreement has not been reached, we can proceed with selling off items in the restaurant. We have that option, though I’m not necessarily saying we will exercise it. We would prefer they reopen and continue to serve their customers. The owner is welcome to visit us in our office. We would like to get this settled.”
Lyons called Mexicano Taqueria’s tax debt “a considerable amount,” and said the Comptroller’s Office closed the restaurant only after other attempts to address the debt failed. He said such seizures are part of routine collection efforts but are rare.
Information provided by the Secretary of State’s Office and McLennan County Appraisal District show the restaurant is owned by FJ Restaurant Inc., an entity dating to Dec. 21, 2011. Juan Leon is listed as officer and director, and Steve Villegas, with Austin accounting firm Villegas and Villegas, is identified as registered agent. That firm no longer provides accounting services to FJ Restaurant Inc., a staffer said by phone.
Priest said Thursday he became the Mexicano Taqueria landlord about two years ago and viewed the restaurant as “a mainstay in China Spring.”
“It’s really the only place out there that serves Mexican food, and everyone I know who has eaten there likes it,” Priest said. “They do very well, especially on Fridays and Saturdays. I was very surprised by what transpired.”
Lyons said he does not know the “play-by-play details” of how Thursday’s payment was made. He said the gesture was a good-faith start but that the situation remains unsettled.
Records at the McLennan County Tax Office show Mexicano Taqueria Grill & Bar owes $5,756 in property taxes on merchandise and inventory at the China Spring Road location by the end of February, including $3,925 in base taxes and $1,830 in penalty and interest on delinquent tax debt owed the city of Waco, McLennan County, China Spring Independent School District and McLennan Community College.
Those records list assets totaling an estimated $50,000 at the location.
Lyons said taxes on mixed beverages the state loses because of nonpayment also affect cities and counties, which receive rebates on the 6.7 percent mixed beverage tax and the 8.25 cent sales tax on mixed drinks.
The Comptroller’s Office in January sent a $163,000 rebate to Waco and another for $176,261 to McLennan County for mixed-drink sales during the fourth quarter of 2018, according to the Comptroller’s Office.
Waco budget officer Laura Mendoza said the city has received rebates totaling $322,000 on mixed-drink sales within city limits so far during fiscal year 2018-19. Those payments go into the city’s general fund.