Shuttered Lost Horse bar owes tens of thousands of dollars in unpaid taxes, says state comptroller

The Lost Horse bar on East San Antonio Street, rebranded by new owner Michael Shaddox as the “World Famous Lost Horse Saloon” in 2020, is currently closed as the state seeks to collect delinquent taxes from the business. Staff photo by Maisie Crow.

MARFA — “The World Famous Lost Horse Saloon,” a pandemic-era relaunch of the beloved dive bar that had occupied 306 East San Antonio Street since 2010, is currently closed as its operator faces tens of thousands of dollars in unpaid sales and alcohol taxes.

The bar has been operated by Ruidosa resident Michael Shaddox since 2020, when he bought the business from founder and longtime operator Ty Mitchell. Following Governor Greg Abott’s pandemic shutdowns, Mitchell opted not to reopen the watering hole he had run for nearly a decade — Shaddox, at the time, called that a “tragedy,” and opted to take the reins. He replaced third-party food vendor El Camino with an in-house kitchen and rebranded the space, previously the Lost Horse Saloon, as “The World Famous Lost Horse Saloon.”

Now, the space sits unoccupied, its liquor license suspended, as Shaddox is saddled with hefty delinquent state taxes and fees. Shaddox did not respond to multiple requests for comment  by press time.

As of last week, per the most recently available data, the Lost Horse owed the Texas Comptroller’s office $12,252.57 in sales tax, $14,512.60 in mixed beverage sales tax, and $10,018.37 in mixed beverage gross receipts tax, according to agency spokesperson Kevin Lyons. 

The business also had not filed its annual franchise tax report, due on May 15 of each year, for 2022 — Lyons estimated that unpaid tax amounted to $1,282.68.

The debt led the comptroller’s office to place a lien on the property in August of 2022, records show — that lien was specifically due to unpaid mixed beverage sales tax for the month of April 2022. The lien on the property remains active, according to Lyons. A state tax lien is one method the comptroller’s office uses to attempt the collection of delinquent taxes and fees.

“It’s not even their money — it’s the citizens’ of Texas money, it’s Presidio County’s money, it’s the City of Marfa’s money,” said Lyons.

The City of Marfa imposes a sales tax of $0.0175 on the dollar, meaning that for every $100 the Comptroller’s office collects in sales tax, $1.75 goes to the City. 

Records show that the Lost Horse’s sales tax permit, administered by the comptroller’s office, has been inactive since February 21, 2023. Public records supplied by the Texas Alcoholic Beverage Commission show that the Lost Horse’s liquor permit was placed on summary suspension on March 10, 2023, due to a failure to pay state taxes.

Lyons clarified that the periods for the sales tax delinquencies are August, November and December of 2022 and January of 2023; the mixed beverage sales tax delinquencies span the period of May of 2022 through January of 2023, while the the mixed beverage gross receipts debt stems from July, August, October, November and December of 2022 as well as January of 2023.

However, Lyons was clear that while the business is delinquent on its state taxes, the comptroller’s office did not close down the bar — that would fall to the property owner, listed in public records as Fort Davis-based Fortuna Realty Investors LLC.

“We’re not the ones that closed it — the landlord did,” said Lyons.

Members associated with the LLC could not be reached by press time. It was not immediately clear what will become of the space moving forward.

Interim Marfa Police Chief Gilbert Carillo said that officers with the state comptroller’s office had come to Marfa in January looking for the business owner — the local police department was not involved in the action, Carillo clarified, but was simply being informed of the state officials’ presence.

“They just came and told us they were going to be there,” said Carillo. “And after they left, they told us that the building was closed, no one can operate from there, and just keep an eye on it, like a security check on the property [to] make sure no one will break into it. It was already closed.”

Lyons said he was unable to comment on any specific instance, but confirmed the comptroller’s office does send representatives to places of business in attempts to collect unpaid taxes.

“There are lots of ways we reach taxpayers, and one of those ways is we visit the place of business,” he said. “We have enforcement field offices all over Texas, so if taxpayers are behind that’s common for us to come to their place of business.”

Shaddox’s Lost Horse has run into trouble with the law in the past — in 2021, Shaddox was charged with serving alcohol to minors at the establishment.