ITHACA, N.Y. — An Ithaca businessman is under arrest on two felony charges stemming from underreporting taxable sales and sales tax due between 2005 and 2012.

New York Attorney General Eric Schneiderman and Jerry Boone, commissioner of the New York State Department of Taxation and Finance, announced the arrest of Jonathan Pargh in a news release issued Wednesday.

Pargh, 59, owned a “head shop” called “3-D Light” and a women’s clothing and accessory store called “Loose Threads.” He operated both businesses as sole proprietorships, and both stores collected sales taxes on all retail sales.

An investigation by the state Taxation and Finance Department revealed that Pargh underreported more than $1.1 million in taxable sales for both 3-D Light and Loose Threads between June 1, 2005 and August 31, 2012, Schneiderman’s office said.

Pargh also underreported gross business income of more than $632,000 on his New York personal-income tax returns for both retail stores, which were subject to income tax.

As a result, between June 1, 2005 and August 31, 2012, Pargh “failed” to pay sales tax of more than $86,000 that he owed New York and personal-income tax of nearly $49,000 that he also owed New York, according to the release.

Pargh was arraigned Wednesday morning before Judge Richard Wallace in Ithaca City Court on one felony count of grand larceny in the third degree and one felony count of criminal tax fraud in the fourth degree.

The case has been transferred to Tompkins County Court for further proceedings.

Contact Reinhardt at ereinhardt@cnybj.com