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Contractor Fails to Withhold 11 Years Payroll Taxes, Only Forced to Pay Two

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Friday, September 14, 2018   

CHARLESTON, W. Va. – A highway contractor that was found to not be withholding West Virginia state payroll taxes for a decade is being required by the state to pay back only two years' worth.

Florida industrial painting company Seminole Equipment was the low bidder on a South Charleston bridge project.

Steve White, director of Affiliated Construction Trades, said through payroll records, the union found Seminole hadn't withheld state payroll taxes for about $10 million in contracts going back 11 years.

White said the union filed a complaint and even picketed last fall, but the state put a lien on Seminole for only the last two years' worth of withholding.

"How could a company not withholding income tax not be required to make good on that?" asked White. "If it was a person locally that hadn't paid for 11 years, and they got caught, we'd all be expecting 'em to pay up."

The West Virginia State Revenue Department lien is for more than $160,000 for "accrued withholding, interest, additions to tax and penalties." Neither Seminole nor the Revenue Department returned calls requesting comment for this report.

White said he isn't sure if the two-year limit is set by law, or represents the state's lack of will to go after the money. Either way, in his view, it needs to change.

The construction trade unions watch public contracts closely, and often report what they find. The website WVCheckbook.gov also provides detailed information about state contracts and spending.

White believes that too often, West Virginia lets low-cost, non-union contractors come in from out of state and underbid on public work. According to White, at times these companies cut corners and do a shoddy job.

"It's a privilege to get the tax dollars, you know - they don't have a right to it, coming from Florida," he insisted. "If you've been caught cheating, you should be barred from bidding projects for a period of time, if not forever. Let those honest companies have a chance to get this work, and it'll probably turn out to be a better job."

White estimated the company may owe the state close to a half-million dollars for improper withholding. He added if those employees file state tax returns, West Virginia is on the hook for any refunds.

And he pointed out that, despite this controversy, Seminole Equipment has a current $8.5 million contract for work in Raleigh County.



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