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Fort Frances retailer reconsiders threat to withhold provincial tax.

Fort Frances retailer reconsiders threat to withhold provincial tax

Steven Lundon, the Fort Frances retailer who received attention for threatening to withhold sales tax revenues from the province, has reconsidered his threat.

On the advice of his lawyer, Lundon decided to remit the tax he collected in April by the May 23 deadline. However, he is also sending a letter of protest to the province.

Lundon, president of 558633 Ontario Limited (which does business as the Northern Do-It Centre) in Fort Frances, informed the Ministry of Revenue early last month that he would stop remitting the retail sales tax that his business collects, which during a busy month can amount to as much as $40,000.

Lundon threatened to deposit the money in a trust fund until the province deals with the cross-border shopping crisis.

Now, following a meeting between provincial Revenue Minister Shelley Wark-Martyn and her federal counterpart, Otto Jelinek, Lundon believes the crisis is finally being addressed.

Wark-Martyn indicated last month that she would ask the federal government to collect the retail sales tax at the border.

"If things are moving in the right direction then there is no more need to make waves," commented Lundon. "At least they (the provincial and federal governments) are responding."

However, Lundon warned that he will withhold the tax he collected in May if no progress is made on solving the crisis.

Lundon says border businesses such as his are at a competitive disadvantage because Canadian consumers are not paying provincial sales tax on all goods they purchase in the U.S.

In a May 1 letter to Premier Bob Rae Lundon claimed that the situation has created "an unfair, eight-per-cent advantage" for U.S. retailers.

He estimated that his business loses about $1 million in sales each year to U.S. competitors.

However, if Lundon chooses to withhold the tax the move could prove costly.

According to Burke Williams, director of the retail sales tax branch of the Ministry of Revenue, any failure to remit the tax normally results in a fine of 10 per cent of total monthly receipts (to a maximum of $1,000). Interest on overdue tax revenues is calculated daily at 13 per cent.

Although Lundon has received support from area businesses, he says it still has to be determined how consumers will respond to his threat.

"How are they (consumers) going to respond to the fact that we have started something affecting their out-shopping, that they may have to start paying (the tax) at the border?" he asked.

"I am not a masochist. If other business don't support us, we'll have to back off," he admitted.
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Title Annotation:Steven Lundon, president of 558633 Ontario Limited
Author:McDougall, Douglas
Publication:Northern Ontario Business
Date:Jun 1, 1991
Previous Article:Mayor claims city was deceived.
Next Article:Company benefits from article published in our April edition.

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