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August 30, 2006

Adult Novelty Items Store Owner Arrested in $63,000 Tax Theft Case

The owner of an adult novelty items store was arrested today on charges that he stole more than $63,000 in sales tax he collected from customers but failed to send in to the state, the Florida Department of Revenue announced.

Kenneth L. Smith, 44, of Tallahassee, turned himself in to the Leon County Sheriff’s Department today on felony charges relating to failure to file tax returns and pay tax. If convicted, he faces up to 5 years in prison and up to $5,000 in fines, as well as possible repayment of stolen tax, interest, penalty and investigative costs. Smith operated the Condomology Super Store doing business as same at 1700 N. Monroe Street, Tallahassee, Florida. The business is now closed.

According to Revenue Department investigators, Smith routinely collected tax from customers at his business. However, during various periods between January 2003 and April 2005, Smith failed to send in to the state all of the sales taxes that he had collected. Investigators found that Smith had illegally kept $68,821.56 in tax money. Under state law, sales tax is the property of the state at the moment of collection. Department of Revenue staff repeatedly visited and called Smith in an attempt to help him come into compliance with state tax law, but he failed to meet his legal obligations.

“To be fair, tax law must apply uniformly to all businesses,” said Jim Zingale, executive director of the Revenue Department. “Tax cheats steal money that the public pays to support vital public services, such as law enforcement and education. They also steal a competitive advantage over honest businesspeople who pay their taxes. The Department of Revenue cannot and will not allow this to occur.”

If you have information about tax theft, please call the Florida Department of Revenue investigations office in Tallahassee at 850-922-2666.