Bankruptcy Filing Shows Outwrite Failed to Pay State Sales Tax it Collected

By Jim Burress

Atlanta, GA – Outwrite, the iconic lesbian, gay, bisexual and transgender bookstore at 10th & Piedmont, closed for good this week.

Bankruptcy filings show the business struggled to stay afloat for years, and in the process, amassed a staggering debt.

"I think it's been about five years when things started to get rough financially," says owner Philip Rafshoon.

Rafshoon blames the bad economy -- and himself -- for the store's closure and bankruptcy, which is detailed in a 112-page filing obtained by WABE.

According to the filing, the store lost nearly $150,000 since 2009.

It now owes hundreds of creditors more than a half-million dollars.

That includes nearly $40,000 in back rent, $88,000 in credit card debt, and $184,000 in back taxes, penalties and interest -- taxes Outwrite collected over nearly four years, but failed to pay the state.

"There are several statues that prohibit a business from retaining sales tax money without sending it back to the state," says WABE legal analyst and criminal defense attorney Page Pate.

Although rare, Pate says there is one similar case where the state did just that.

"The business owner in that case was convicted and sentenced to a misdemeanor," says Pate. "And the statute provides that in addition to a possible sentence of 12-months, there's a fine of up to $10,000."

Rafshoon says he's discussed the issue with his attorney, but declined further comment.

"It's out there on the public record in the bankruptcy, and that will all be decided in the courts," says Rafshoon.