Saltwater Oyster Depot, Inverness’s only restaurant and a boon for locals and visitors alike, is in limbo after California officials suspended its beer and wine license over hundreds of thousands of dollars in unpaid sales taxes uncovered in a recent audit.
Owner Luc Chamberland said the trouble began during the pandemic, when he cut administrative staff and took over the bookkeeping himself.
“If you’re in any business that involves the sale of goods and services, one of the sacrosanct things you have to do is report accurately and timely your sales and remit your sales tax,” he said. “We fell behind.”
An audit this year by the California Department of Tax and Fee Administration concluded that Saltwater owed “in excess of a couple hundred thousand dollars,” Mr. Chamberland said.
For businesses that sell alcohol, the C.D.T.F.A.’s most effective hammer is a “tax hold” on the delinquent account carried out with the help of the Department of Alcoholic Beverage Control, which can suspend a liquor license until the debt is paid in full. Mr. Chamberland said he was given 45 days to settle the debt.
“Anyone who knows the restaurant industry knows [alcohol is] where you make the easiest money,” said Mr. Chamberland, whose changing menu revolves around locally caught seafood. “It justifies the whole thing.”
The two state agencies work in tandem: the C.D.T.F.A., which oversees tax collection and compliance, can place a delinquent account on hold; if the debt is not resolved, the A.B.C. enforces the hold by suspending the license to sell beer, wine or spirits. Genette Brookshire, an information officer for C.D.T.F.A., said alcoholic beverage licenses may be suspended if a business is three or more months past due in the payment of taxes or penalties. She declined to comment on Saltwater’s case.
The restaurant, which Mr. Chamberland opened in 2012, will be closed until further notice. A hearing with state tax officials on Aug. 19 will determine whether the restaurant can resume operations, but he has encouraged his 10 employees to seek other work.
Even before the audit, Saltwater was strained by a labor shortage, Mr. Chamberland said. Most of his workers hold more than one job, and more than half live on ranches in the Point Reyes National Seashore that they must vacate by March under a federal settlement that is phasing out most ranching in the park.
He described one employee who lives in the seashore, works as a dishwasher at the restaurant, cleans houses, and makes cheese at Point Reyes Farmstead Cheese Company. “Things are going to escalate quickly because the drop-dead date is March 2026, and most can’t find housing here they can afford,” Mr. Chamberland said. “I’m looking at that and thinking, ‘Okay, what’s the outlook of securing more employees?’ It’s not good.”
Housing costs, he added, make the economics of a small restaurant nearly impossible. When he moved to West Marin in 1986, rent consumed less than 20 percent of his income. “It allowed me to save money, cover my own health insurance, eat well and have hope,” he said.
At the peak of his business, before the pandemic, Saltwater employed 24 people, eight living with their parents well into their 30s, eight spending at least 30 percent of their income on rent and eight living in their cars.
“I’m feeling discouraged by the prospect of finding affordable housing for my employees where I’m not creating indentured servitude,” he said.
Mr. Chamberland started his business with a set of high-minded principles: “I wanted to get the best organic food grown locally, to support the local economy, to pay my employees well. I’d rather not run a business than sacrifice those ideals.”