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Investigation of alleged $5.6M Tacos Guaymas tax scheme began in 2014 on Broadway

Some of the customers ordering at Broadway’s Tacos Guaymas on September 30th, 2014 weren’t there for the affordable Mexican food served inside a bustling but tiny Capitol Hill restaurant space. Eight times, according to the office of Attorney General Bob Ferguson, investigators from the Department of Revenue visited the restaurant that Tuesday.

Last week, founder and owner of the Tacos Guaymas chain Salvador Sahagun was charged with six counts of first-degree theft and three counts of possessing and using sales suppression software in what the AG says was a multi-year scheme to pocket more than $5.6 million in sales tax from cash transactions.

While the statute of limitations has run out on any crimes related to the eight transactions that day on Broadway in 2014, state investigators estimate that some $78,000 in tax revenue went missing from the Capitol Hill location of the restaurant over the years.

Here is how the AG says the suppression works:

Run on a point-of-sale computer or cash register, sales suppression software surreptitiously deletes or underreports cash transactions. The software then re-balances the company financial records to show a lower sales figure, reducing the business’ sales tax obligation. The retailer pockets the difference between what the patron paid, including the full sales tax, and what the software reports. These unscrupulous retailers often keep “two sets of books.”

Prosecutors also say “the majority of sales receipts were missing” from the point of sales system.

According to the Attorney General’s announcement of the charges, the investigation began after an audit revealed discrepancies between Sahagun’s tax returns and his system’s point of sales records. Starting with the Broadway Tacos Guaymas visit, DOR employees “visited the seven restaurants on several occasions and paid cash for their meals” —

The auditor then compared the employees’ receipts with the receipts on the point-of-sale system to determine whether the transactions existed and the amounts matched. The auditor found that three of the restaurants were using sales suppression software to delete or underreport cash transactions.

In addition to the three locations the AG’s office says were using the software to suppress sales totals,the three other locations also owed sales tax. In total, the auditor determined Sahagun owed $5,615,497 to the state.




No charges were brought for use of suppression software on Broadway. “For Tacos Guaymas Broadway, the statute of limitations for use of sales suppression software had expired before charges could be filed.”

Sahagun, 57, started Tacos Guaymas in West Seattle 25 years ago. His Broadway location was forced to move to the 1400 block of Broadway when Chipotle took over the original space in 2012. He has not yet entered a plea on the charges.

The Broadway Tacos Guaymas was open Monday and other locations continue to operate.

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4 thoughts on “Investigation of alleged $5.6M Tacos Guaymas tax scheme began in 2014 on Broadway

  1. Thanks for stealing from WA taxpayers….that money could have gone to roads, schools, parks – instead just lined their greasy a** pockets. The food is nasty af too so :( not even very good at what they set out to do. Not even good at deception either because the auditors found them out. Tacos G just quit now – you suck.