MURFREESBORO, Tenn. (WKRN) — A Murfreesboro indoor playground is preparing to close its doors months after a state tax mix-up left the small business without thousands of dollars, triggering what its owner describes as a financial crisis it could not recover from.
Kids Corner owner Cayla Poindexter told News 2 Oct. 29 will be the final day of business after nearly four years serving families in Rutherford County.
“We’re not closing because families don’t like Kids Corner. We’re not closing because we don’t have any customers,” Poindexter said. “We got stuck paying yesterday’s bills and today’s bills because of what happened to us.”
News 2 first spoke with Poindexter in May after more than $6,700 was taken from her business’s bank account through a levy connected to a state unemployment tax issue.
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The Tennessee Department of Labor and Workforce Development previously told News 2 the problem began in January 2024 when a third-party payroll provider mistakenly used Kid’s Corner’s account number while filing for another employer.
The department said it corrected the initial errors, but additional incorrect filings and a lack of communication allowed the case to advance through the legal process. By the time the final correction was made, court collection actions had already begun.
Poindexter said the money was taken in early May, leaving her without the savings she relied on to cover expenses during slower months.
It wasn’t until late July that she received a refund of just under $6,000. By then, she said, the financial damage had already been done.
“I mean, I was relieved to get it back. I don’t want to discount that,” Poindexter said. “People think, ‘They got their money back, it’s all fine now,’ but it’s not fine because it started a snowball effect of irreparable financial damage to our business.”
Poindexter said she was forced to take out a cash advance to keep the business operating while waiting for the money to be returned.
That advance came with an upfront fee of several hundred dollars and requires 20% of the business’s daily sales to go toward repayment.
With those increased costs, Poindexter said the business also fell behind on rent and sales tax payments, resulting in additional fees, penalties and interest.
The financial strain was especially difficult because the money was taken during one of the indoor playground’s slower seasons.
Poindexter said she had planned for those seasonal fluctuations, but losing access to the business’s savings left her without a financial safety net.
“We’ve always had those 70-and-sunny days where we don’t see very many visitors and we had prepared for that,” she said. “Now we don’t have that cushion or that war chest to dip into during these slow months.”
Poindexter said she believes the business would still be operating if the money had never been taken.
Despite receiving most of the money back, Poindexter said she remains frustrated with how the situation was handled. She said the state did not refund the court fees or banking transfer fees associated with the collection.
Poindexter also said she requested a new account number after discovering another payroll company had been using hers, but was told it was unnecessary.
She claims she can still see at least one person who has never worked for her filing for unemployment under the business’s account.
“I just don’t feel confident in that solution still to this day,” she said.
In its previous statement to News 2, the Department of Labor and Workforce Development said it had provided the business more time than required by law to address the issue and that a repayment plan could have prevented the collection actions.
The department also said that once the collection process began, the courts controlled the disbursement of the money.
For Poindexter, the closure means more than losing a business. Her youngest child was not yet 2-years-old when the business opened. He is now in kindergarten, and her eldest daughter works there.
Poindexter said the announcement has been emotional for customers, some of whom have watched their children grow up at Kid’s Corner.
“It’s been a really tough week, lots of feelings, lots of tears from not just me, but customers coming up to me and hugging me and crying,” she said.
The business plans to hold its annual Boo JAMA Party on Oct. 29, featuring a free music class, crafts and snacks, as its final celebration.
But Poindexter is still holding out hope that the doors won’t have to close permanently.
She is looking for someone interested in taking over the lease and continuing the business under new ownership.
“I know there is a lot of life and love and memories left to be had here and I would hate to see it all end because of this,” Poindexter said.
Source: www.wkrn.com
