The New Mexico Secretary of Taxation and Revenue is seeking a court order to halt WisePies Franchise Services from doing business until the company gets up to date on its taxes – something a company spokeswoman said it intends to do immediately.
The state applied for the injunction in state District Court in Santa Fe on Tuesday, noting in its filing that WisePies has a current outstanding gross receipts tax liability of $11,936 and that interest continues to accrue. The company “has continually been non-compliant” in paying gross receipts taxes and also failed to pay workers’ compensation fees on multiple occasions, according to an accompanying affidavit from a state revenue agent.
WisePies – which has the naming rights to University of New Mexico’s basketball arena, aka the Pit – has not complied with a state request to enter into an installment agreement, and co-owner Mike Baird has not communicated with the department since July 1, the affidavit says.
Baird is no longer involved in WisePies operations, according to the company, though he remains an owner. He did not immediately respond to a Journal message late Wednesday.
In an Aug. 16 letter addressed to Baird and included in Tuesday’s filing, the state demanded WisePies “furnish acceptable security in the amount of $17,607.12 … in order to ensure payment of tax due or reasonably expected to become due from you.” It gave Baird 10 days to respond.
WisePies Franchise Services is the corporate entity for the WisePies Pizza & Salad chain. However, the company itself does not own any of the nine WisePies-branded restaurants.
WisePies spokeswoman Season Elliott said Wednesday that WisePies co-owner Steve Chavez was not aware the company still owed the state back taxes but had already made out a check and intended to make the payment “immediately” and thus thwart any potential shutdown.
She said the company recently underwent a leadership transition, with Chavez taking over managing partner duties from Baird on Sept. 1. Baird remains an owner but is no longer involved in operations, Elliott said.
“(Chavez) is committed to making all accounts current and healing relationships that may have been damaged under previous management. He feels the previous handling of taxes is absolutely unacceptable which is why he’s taken it completely over to ensure this NEVER happens again,” Elliott said in an emailed statement. “Since September 1st, Mr. Chavez has paid ALL Federal taxes owed as well as a number of other vendor invoices that needed payment. He has also filed and paid current taxes.”
WisePies Franchise Services has had ongoing tax troubles. The Internal Revenue Service, New Mexico Taxation and Revenue Department and New Mexico Department of Workforce Solutions have filed multiple liens against the company, according to Bernalillo County records.
The county records show three of the seven liens recorded against WisePies have been released, including the two filed by the IRS.
WisePies’ issues have commanded a great deal of community attention due to the company’s naming rights arrangement with UNM.
In 2014, less than a year after opening its first restaurant, the company agreed to give UNM $5 million over 10 years in a deal that renamed the basketball venue WisePies Arena (aka the Pit). WisePies has made the first two payments of $100,000 each, but its contribution is scheduled to escalate to $600,000 annually starting in December.
The company has not grown as quickly as it projected when it signed the UNM deal. Baird told the Journal in May that an unnamed, out-of-state company was preparing to buy a majority interest in the company and would make good on all commitments to UNM.
WisePies has never disclosed the buyer’s identity and the deal has not closed. However, Elliott said it is still in the works.