Shop owner avoiding sales tax ordered to pay up

No city tax paid since 2006 means a tax bill totaling $192,000

The owner of a downtown Juneau gift shop was court-ordered to pay nearly $192,000 after admitting he failed to pay city taxes.


City prosecutor August Petropulos said Larry Lee Lynd, owner of Woolly Mammoth Gifts and Sourdough Larry’s, has been pocketing the city’s sales tax since 2006.

“This is not called theft, but it essentially is,” Petropulos said during Lynd’s change of plea and sentencing hearing in Juneau District Court Friday. “It’s more than just a mere mistake to forget to remit one time or file one time. This has been a pattern over a course of years for Mr. Lynd. Essentially, he’s been stealing money for years.”

Lynd agreed to pleaded guilty to five misdemeanors for failing to file and remit sales tax returns in 2010 and 2011.

The 56-year-old business owner was originally charged with 33 misdemeanor counts. The rest were dismissed in a plea agreement reached with prosecutors.

In accordance with a plea agreement, Judge Keith Levy sentenced Lynd to pay $191,799.17 in restitution for the unremitted sales tax. That means Lynd will have to pay a minimum monthly installment of $1,919.17 for the next 10 years. An interest rate of 3.75 percent began accruing Friday.

Levy also imposed a 2 1/2 year jail sentence with all time suspended and a $5,000 fine, also all suspended. Lynd was also required to serve 10 years of probation, though that time could be shortened if he pays the restitution sooner than anticipated.

A review of the City and Borough of Juneau Sales Tax Administrator’s records last fall revealed that Lynd had not filed a CBJ Sales Tax Return, nor remitted CBJ sales tax, from September 2006 to about June 2011, according to an affidavit filed by city prosecutor Amy Mead.

The city then conducted a “controlled buy” to investigate whether Lynd, doing business as Sourdough Larry’s, was identifying collected sales tax on any sales receipts. The investigation found he was not, the affidavit charges.

The city warned Lynd twice in 2008 that he owed the city a total of $120,100 in unremitted sales tax, penalties and interest. But Lynd failed to respond.

City ordinance requires business owners to collect sales tax on items purchased then hand that tax over to the government. Petropulos noted that money never belongs to the business owner — it belongs to the tax payers of Juneau.

“That money that’s designated as sales tax is never his,” Petropulos said. “It’s just his obligation to collect it and hand it over.”

The city originally wanted Lynd to pay almost $223,000, according to Mead’s affidavit. That amount was reduced in the plea agreement.

Lynd’s attorney David Mallet told the judge that by pleading guilty his client had taken responsibility for his actions. Mallet added he was pleased with the plea agreement that was reached, especially because it avoided jail time.

“He’s taken responsibility for it, and I think that’s a big part of the plea agreement as well,” Mallet added.

Lynd declined to address the court.

Before Judge Levy imposed the sentence, Levy remarked most business owners set aside the sales tax and calculate what they owe, then file their tax and pay it to the city.

“When you don’t, you’re holding onto money that’s not yours,” Levy said. “That belongs to the city and by extension to the citizens of the city.”

Levy noted Lynd placed the city in an awkward position.

“They don’t want to shut you down. If they shut you down, they don’t get anything,” Levy said. “On the other hand, if you don’t follow through, then you don’t have any choice.”

“Typically, the city’s not going after criminal convictions,” Levy added. “They want people to pay their taxes, and most often what happens is people eventually file after being prodded.”

One of the primary sentencing goals in this case, Levy listed, was to ensure Lynd and other business owners pay the sales tax in the future.

“The city can’t function without this money,” Levy said. “ ... It’s a responsibility you have as a business person.”

• Contact reporter Emily Russo Miller at 523-2263 or at


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