Santarsiero: State should stop buying Staples supplies

Staples the Office Superstore East is delinquent on its state taxes. Another business entity called Staples Business Advantage holds the state contract for office supplies.

State Rep. Steve Santarsiero, D-31, called on the state to stop paying Staples for office supplies because one of its business entities owes more than $850,000 in delinquent taxes.

According to state officials and documents, the business called Staples the Office Superstore East owes $850,885 in delinquent corporation taxes, among the highest amount owed in the state. Another business entity, called Staples Business Advantage, holds a state contract for office supplies.

According to the contract that is posted online, Staples Business Advantage is a division of Staples Contract and Commercial Inc. Documents on the Pennsylvania Department of State's website show that Staples the Office Superstore East and Staples Contract and Commercial Inc. share several of the same executives.

Santarsiero spoke with reporters from his Newtown Township office Wednesday afternoon, calling on the state Department of General Services to immediately halt the contract with Staples until the company pays its back taxes.

A lien was placed on Staples the Office Superstore East on April 23.

The newspaper was unsuccessful in reaching Staples on Wednesday for comment after a message was left with a press office phone number listed on the main Staples website. Another call to a number listed on the U.S. Securities and Exchange Commission's website for Staples Contract and Commercial Inc. was forwarded to the same office and went to voicemail.

"It is unfair to reward companies that don't pay their taxes with lucrative state contracts when residents and other businesses continue to pay their taxes on time and in full," Santarsiero said.

Rob Ciervo, the Newtown Township Republican running against Santarsiero this year, released the following statement: "I agree wholeheartedly that the state should go after anyone not paying their taxes on time. However, Steve Santarsiero always finds taxes and more taxes the answer to everything instead of cutting wasteful spending and making (Pennsylvania) competitive for job creation again."

Elizabeth Brassell, a Department of Revenue spokeswoman, said that the Staples with the state contract and the Staples with the delinquent taxes are two separate business identities.

Under the state's contractor responsibility program, a business entity cannot be paid if it is late on its taxes, Brassel said. For any payment of more than $5,000, she said, the state checks all tax systems to make sure tax payments are current. If taxes are delinquent, payments are withheld until the liability is resolved, she said.

But Santarsiero's office says that the two companies are the same, noting that public documents show the two share executives and business addresses.

"The fact of the matter is, Staples may have a number of different subsidiaries + but in my mind, it doesn't really matter," he said. "There is a relationship and, if a company and any of its subsidiaries or any of its forms has a contract with the state and on the other hand is not paying its share of state taxes, we should not allow that situation to continue.

"It is time that we crack down on national corporations taking advantage of tax-filing loopholes that allow them to shirk their tax obligations while getting state contracts," Santarsiero said.

Staples' contract with the state went into effect June 2008 and expires at the end of May 2011.

Santarsiero also said local school districts and municipalities can use Staples to purchase supplies at discounted rates through a program called COSTARS.

Santarsiero said the state treasury has paid at least $500,000 to Staples in the last fiscal year as part of the state contract, not including the business the company received through COSTARS.

Staples is the 23rd biggest state tax delinquent on a 1,483-page list. The corporation is one of tens of thousands of businesses and individuals that owe a total of about $233 million to the state in back taxes.

The 8th district includes Lower Makefield, Yardley, Newtown, Newtown Township and District 2 of Upper Makefield.