Posted on: Wednesday, April 13, 2005

Unpaid recycler still owes taxes

By Sean Hao
Advertiser Staff Writer

The state failed to reimburse a recycling company for deposits it paid consumers under Hawai'i's new bottle law in part because the company owed back taxes, the attorney general's office said yesterday.

On Monday Island Recycling Inc. President Jim Nutter said he would stop accepting bottles and cans at his redemption center in Kalihi because his company was owed $250,000 by the state for bottles already collected.

The state acknowledged on Monday that it fell behind on refunds to some recyclers because of problems getting authorizations needed to spend the money.

Yesterday Deputy Attorney General Hugh Jones said the issue was complicated by general excise taxes owed by Island Recycling dating to 1999. Jones said state officials previously were unable to discuss the issue because of taxpayer confidentiality laws.

Jones said the state Department of Taxation filed a $146,148.27 lien yesterday against money owed Island Recycling by the Department of Health.

Once the back taxes are paid, Island Recycling should receive about $120,000 for bottle deposits, Jones said.

"Part of the problem was the state's budgeting system," Jones said. "Since the end of March it's been complicated by the Tax Department making inquiries to the Health Department," which administers the bottle law.

Apart from the money owed Island Recycling the state now is current in payments to redemption centers, Jones said.

Nutter did not return phone calls yesterday seeking comment.

Reach Sean Hao at 525-8093 or shao@honoluluadvertiser.com.