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Hot-Dog Man wins bout with state over sales tax

By COLBY FRAZIER — Oct. 13, 2009

Round by round, Bill Connell took some blows, but landed plenty of stiff jabs.

And when the bell rang on Sunday afternoon, after 16 years of sparring with the state of California over a 137-year-old law that exempts military veterans who vend, hawk and peddle their wares on the street from collecting sales tax, Connell, otherwise known as Hot-Dog Man, was on his feet, arm raised in victory.

But Connell’s championship boxing days are long past. That bell he heard ringing was Gov. Schwarzenegger’s pen scrawling his burley signature across the bottom of Senate Bill 809, also known as the “Hot Dog Man” bill.

With the signature, Connell and the estimated 5,600 veterans who make a living by selling everything from T-shirts to hot dogs no longer have to collect sales tax, and most importantly, don’t have to pay sales tax, as they’d been illegitimately forced to do for decades.

“I’m a very happy man right now,” Connell said yesterday, preparing to crack open a bottle of champagne he’d been aging for the better part of two decades. “It’s called party time for me. After 16 years of butting my head against the wall I finally broke the wall back.”

When Connell came to Carpinteria 17 years ago, he was a Vietnam veteran from New Jersey who wanted a good hot dog. But none could be found, so Connell started All American Surfdogs and set up shop at the intersection of Bailard and Carpinteria avenues on the Carpinteria Bluffs.

As a veteran who suffered hearing damage (the exemption only covers disabled veterans who were honorably discharged), Connell knew before selling his first hot dog that a state law passed in 1872 exempted him from collecting sales tax.

When he ran his plans by the state Board of Equalization, he bumped up against state-sponsored resistance.

“When I asked them that question you would have thought I stole someone’s child or something,” he said, noting that officials told him the law “doesn’t mean what it says.”

“I looked at them, I said, ‘Screw you. I’m Catholic school educated. I know what it says.’”

Connell had two choices: roll over and quietly pay his quarterly sales tax, or fight.

“I chose to fight them,” he said. “I did the look in the mirror type thing. I said, ‘Screw them. I’m right, they’re wrong.’ It’s taken a lot of my time and it’s put a lot of gray hairs on me.”

And like Connell, the state also chose to fight. It remains unclear if they knew whom they were jumping into the ring with.

Connell, 55, never made it to the jungles of Vietnam. Due to the Paris Peace Accords in the early 1970s, Connell was stationed in Frankfurt, West Germany, where he remained for the duration of the war. But it would be incorrect to say Connell didn’t fight.

He became a heavyweight champion boxer during his time in the military. After being honorably discharged with minor hearing damage, suffered from taking blows to the head, Connell went on to a successful professional career, retiring with 16 wins, three losses and one draw.

The Hot-Dog Man took the tenacity he showed in the ring to his bout with the state.

According to Connell, a consultant once hired by the state to deal with the veteran’s tax “issue” labeled him the “most dangerous man in Southern California.” During Connell’s 16-year battle, he said his case made its way across the desks of 175 state-hired tax attorneys.

Connell did it all without an attorney. He said he spent thousands of hours in the law library at the Santa Barbara County Courthouse, and roughly $100,000 of his own money.

Over the last two years, as the battle began to heat up, Connell made 16 trips to Sacramento to “shepherd” his bill through the gauntlet-like legislative process.

Throughout most of this time, Connell collected sales tax and grudgingly forked it over to the state. However, he ceased this practice in 2003 when the Board of Equalization attempted to change the 1872 law in an effort to abolish veteran’s exemption. Connell defeated this and two other attempts, the most recent of which occurred in 2008. He said the effort to expunge the law from the books was an admission that the law applied to him and his fellow veterans.

“If sales and use tax applied to me there’s no reason to change the law,” he explained. “I wrote them and gave them a perfect legal argument. They almost died.”

The bill, which didn’t receive a single dissenting vote as it worked through the legislature, essentially updates the 1872 law, patching up loopholes that were used by the Board of Equalization to collect sales tax from veterans.

A spokeswoman for state Senator Jeff Denham, chair of the Senate Veterans Affairs Committee, called the new law a “technical cleanup bill.”

“It’s just the right thing to do,” the spokeswoman, Jann Taber, said. “It basically makes it very clear that [veterans] are consumers not retailers and they don’t have to collect and turn in sales taxes when they sell their wares on the street.”

The law only exempts items that cost less than $100 and excludes the sale of alcoholic beverages. The bill does not exempt vendors from paying sales tax for the products they sell.

Now Connell hopes to recoup the estimated $50,000 he paid in sales tax before he ceased this practice in 2003. He estimates the state owes “millions” to all sales tax exempt vendors.

Taber said exact numbers are difficult to determine, but she called the amount of revenue the cash-strapped state stands to lose as a result of the new bill “nominal.”

For now, Connell plans to celebrate. On Oct. 22 he’s serving up free hotdogs to his customers and politicians (he especially gave praise to 1st District Supervisor Salud Carbajal and the staff of Assemblyman Pedro Nava) who helped him along the way.

But more immediately, Connell said he planned to pop the cork on a bottle of champagne that’s well aged.

“I’ll tell you this,” he said. “It’s got cobwebs on it.”

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Spelling : 10/13/2009

The correct word is " Champagne" as in the drink not "Champaign" unless you are drinking the lake by the same name

Yim Johnson

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Bravo! The "Little" (Big) Guy Wins One Against the State! : 10/13/2009

Thanks for sticking up for the law, Bill. Like you did in the ring, you never gave up! Thanks from all the vets here in CA.

The Barron

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spelling : 10/13/2009

As I was reading this article I also noticed the misspelling of champagne....twice. Really not a big deal but how could something so glaring get by the editors twice? Anyway, good story and good for the "Hotdog Guy". I have had his dogs many times and they are delicious.

sv

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Champaign : 10/13/2009

I think "champaign" is like a prairie or open meadow. That is probably how it got by the "spell check". Sorry to dwell on such a trifle.

sv

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: 10/13/2009

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the hot dog man : 10/13/2009

My husband & I love Bill's hot dogs and we talk a little baseball when ever we can..you put up a good figh t& we want to congratate you. Hope to see you for many more years right where you are now. Bailard & Carp.

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: 10/13/2009

Thanks for the spelling note. Bill is now drinking Champagne.

Editor

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This is a smart businessman : 10/13/2009

Too bad our president has never even run a hotdog stand. He might be more competent at running a country.

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Bill for Governor! : 10/13/2009

Please consider running for Office Bill, you are popular, well known, have constant success in business and fighting government bureaucrats and you know how to manage money. I'm serious.

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Party Date : 10/13/2009

The Celebration Date is October 22nd, not the 20th.

RF

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the president is no hot dog : 10/13/2009

It's too bad that it didn't come out during the election that Obama did not run a hotdog stand. Now that shameful story has been revealed, impeachment should be a done deal. Unfortunately those hot dog hating demon-crats will probably say this is sadly irrelevant, and anyone who thinks so has the mentality of an infant. It makes me sooooo angry! Sorry, got to go gnash my teeth, rend my garments, and spew more opinions on the internet. Rusho es Dio!

deth to all spell chekers

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Good for You : 10/13/2009

It's good to know that the law can protect those on the right side of it... and I work for BOE

LAW

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Butt Dog! : 10/13/2009

I had one of those hot dogs once. it tasted like he pulled it out of his butt....never again!

wowo man

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good man Bill! : 10/14/2009

Its funny how a government instituted by the people for the people STILL tries to make its own rules....and is SO CORRUPT. Bill, bless you my good man as you MADE the system obey the law and do the right thing. Shame on you you DIRTY rotten state tax Lawyers! those of You who fought Bill. You should all be dis-barred! And this case is only the tip of the ice berg. Other people are coming for you state criminals! we will win in the end! WE THE PEOPLE!!!! Amen! (p.s. no wonder why Ca is broke! its CORRUPT in so many ways!!!!)

Mr Law of the people

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Funny comment : 10/14/2009

To wowoman, Your comment made me absolutely burst out a laugh, but I disagree about your assessment. His dogs are delicious. Peace

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How it happens : 10/14/2009

Bravo to his tenacity, and willingness to go in for the long haul. Now, also, kudos to the law library staff for giving him excellent direction, and no doubt, moral support. Don't the local attorneys eat hot dogs...? : )

Missy V.

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Victory : 10/18/2009

Surf Dog is a beacon of freedom; driving up the 101 & seeing the American flag shouts liberty! The hot dogs are the best around, people are so friendly, and Bill Connell can carry on with anyone. The highlight of many days.

-sc

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a hook can beat the crook and a right can baet the might : 10/21/2009

keep punching Bill. You made a difference !!! Now turn that champagne into a campaine for seat in congress This Hanging Judge is in your corner!!

hjk

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spell check : 10/21/2009

Go ahead, just want to drive spell checkers crazy

hjk

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