Attorney General Martha Coakley's Office Announces Guilty Plea of Hyannis Business Owner for Failing to Pay Over $245,000 in Sales Tax and Failing to File Excise Tax Returns
An investigation conducted by the Attorney General's Office began in February 2008 after the matter had been referred by the Massachusetts Department of Revenue (DOR). In 1997, Davidson incorporated Homestead Direct, Inc., which does business as Sid's Furniture in Hyannis. Davidson was the sole officer of the corporation. Although the corporation was involuntarily dissolved in 2007 for failure to file annual reports, the business continued to operate. At the time, businesses selling tangible personal property in Massachusetts were required to collect 5% sales tax on the property sold, and were required on a monthly basis to both file a sales tax return and to pay over the amount of sales tax collected to the DOR. Investigators from the DOR's Criminal Investigations Unit (CIU) determined that, during the period from June 2006 through October 2008, Davidson's business made sales and collected sales tax from purchasers, but failed both to file the required monthly sales tax returns and to pay the sales tax collected over to the DOR. Davidson failed to pay approximately $245,000 in sales tax collected from June 2006 through October 2008 and failed to file corporate excise tax returns, which corporations doing business in the Commonwealth are required to file annually, for the years 2004, 2005, and 2006.
Indictments were returned against Davidson on December 29, 2008. On January 12, 2009, Davidson was arraigned in Suffolk Superior Court at which time he entered a plea of not guilty and was released on personal recognizance. Today, Davidson entered a change of plea to guilty and was sentenced in Suffolk Superior Court. Davidson made a tax payment of $50,000 today, and has made payments totaling an additional $55,000 since the indictments were returned.
The case was prosecuted by Assistant Attorney General Margaret Parks of Attorney General Martha Coakley's Corruption and Fraud Division, and was investigated by DOR Investigator Janel Cosgrove with assistance from Financial Investigator Jennifer Chaves of Attorney General Martha Coakley's Criminal Bureau.