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During the run-up to Fiesta Pequeña on Wednesday afternoon, state tax agents seemed to strike gold, or the secular version of a church bake sale: State Street sidewalks lined with people selling homemade goods, in this case, cascarones, made and decorated by hand. The eight agents were on the prowl for vendors without the seller’s permits that would allow the State of California to collect sales tax. The eight had visited booths in De la Guerra Plaza earlier, said Santa Barbara Police spokesperson Anthony Wagner, but later, when they couldn’t find a place to park, they headed up State Street “on a whim.”
The vendors — generally women and children — were told they were violating the law and faced stiff misdemeanors and possible seizure on Thursday of their eggs, a popular Fiesta tradition, by agents from the California Department of Tax and Fee Administration Statewide Compliance and Outreach Program.
Most of the people selling on State Street this afternoon were worried. It wasn’t clear who had conducted yesterday’s raid — it was the IRS, they said. They’d been told it wasn’t fair to the state for them to be working and not paying taxes. One had driven to Ventura to get a permit as the agents had told her to, after asking her daughter to look it up on her phone. The agents had also told them to call their agency; one woman said the phone went dead when she attempted to reach the Spanish-language line. Another had gone to the library on Wednesday for help, though online searches turned up no information. Yet another had visited the police department, where no one knew about the tax agents.
One woman said she sometimes made $80 in a day, but that all the money goes to her, which made it worthwhile. A few vendors were sanguine about the enforcement by Thursday, but were sure that next year would be different.
Word had gone out via Facebook on Wednesday that scammers were operating among the cascarón vendors, Wagner said. And some of the State Street sellers on Thursday were still sure it was a fraud, a fake. This raid was real, but the perception illustrates the confusion the agents caused.
Santa Barbara police officers intervened during the raids, said Wagner, emphasizing to the state agents that heavy-handed enforcement would upset the positive relationship the police were trying to develop with the Spanish-speaking community. Police also said the sellers may not be able to “sustain an audit,” said Wagner, to collect taxes. Fiesta, a Santa Barbara celebration of the city’s Mexican and Spanish past, has grown since the 1920s into a five-day community party. Cascarones are a party favor, often smashed onto the unsuspecting, which vendors spend months emptying, drying, decorating, filling, and sealing.
The conversation was taken to the city administrator’s office, where an agreement was struck with Nina Johnson, a senior assistant administrator. The tax agents agreed to take no action this year but would return in 2019. The city and police agreed to work with Old Spanish Days, which organizes Fiesta, on education outreach on the State Seller’s Permit for 2019.