Iowa State Fair ousts four vendors for underreporting sales in 2022
Some of the most popular food vendors at the Iowa State Fair will not be returning next year after a state audit found they had underreported thousands of dollars in sales.
The businesses included Hardenbrook Concessions of Carlisle, which has two stands at the fair; Pete’s Lemonade Shake Ups and Pete’s Ice Cream & Snow Cones, which sat next to each other; Dad's Old-Fashioned Lemonade, a five-generation business that had been a fair fixture since 1948; and JR Services, which operates JR Donuts.
JR Services, run by Kenneth Brost of Cedar Falls, and Hardenbrook, run by Dustin Beener of Urbandale, did not respond to messages Friday seeking comment. Pete’s, run by Julie Drury of Marion, and Dad’s Old-Fashioned Lemonade, run by Diane Perry, could not be reached for comment.
The Iowa Department of Revenue, which collects state sales tax, decided to audit the four vendors after observing all 200 at the fair this year. The auditors found Hardenbrook Concessions underreported sales by more than $46,000 over five days at the fair; Pete’s Shake Ups and Pete’s Ice Cream & Snow Cones underreported by almost $32,000 from Aug. 11-16, when it was audited; Dad's Old-Fashioned Lemonade underreported by an estimated $3,450 over the same six days; and JR Services underreported sales totaling $16,530 from Aug. 11-18.
The underreported totals resulted in a loss of sales tax for the state. The revenue department did not say Friday whether the state would be seeking civil or criminal penalties against the businesses.
The fair informed the business by letter that they had violated concession rules and would not be invited back.
“It’s disappointing, but lots of others are doing it right,” said Mindy Williamson, a spokesperson for the fair.
In 2016, the fair increased the percentage of sales it collects from vendors annually, leading to complaints from some that the fair’s take was too high. For food vendors, the amount is 19.5% of annual sales and for those selling alcohol and food it is 22%.
The revenue department crackdown comes after last year's fines by federal and state authorities against a fair beverage distributor who they said had illegally tried to control beer sales at the grandstand.
The Iowa Alcoholic Beverages Division first notified fair officials in 2020 of its investigation into Iowa Beverage Systems. That probe found several violations, including commercial bribery, that led to a $15,700 fine. Another investigation by a bureau of the U.S. Department of the Treasury found different violations of federal law. The agency settled its case this month with a $325,000 fine.
The treasury's Alcohol and Tobacco Tax and Trade Bureau accused Iowa Beverage, of 2115 N.E. 58th Ave., of negotiating a sponsorship in early 2019 under which, in exchange for paying the fair $100,000, the company obtained access to beer taps at the Grandstand from which it could sell its products.
Iowa Beverage also made illegal payments to another retailer that sold beer at different locations at the fairgrounds in 2017, 2018 and 2019, the bureau’s complaint said. The bureau said the payments "were made, in part, to guarantee the retailer only purchased (Iowa Beverage) malt beverage products."
Lee Rood's Reader's Watchdog column helps Iowans get answers and accountability from public officials, the justice system, businesses and nonprofits. Reach her at lrood@registermedia.com, at 515-284-8549, on Twitter at @leerood or on Facebook at Facebook.com/readerswatchdog.
This article originally appeared on Des Moines Register: Four Iowa State Fair vendors barred for underreporting 2022 sales
