Ah, the life of of a small business owner…..fancy free, foot loose, always out photographing and not having a care in the world….. Yup, the life of a small business owner is sparkly, full of chocolate cake (mmmmmm….cake), and sugar plums.
I’ve never actually had a sugar plum. I don’t really know what it is to be honest. I’ll have to google it after……
Alright, now that I’m out of fantasy land, let’s talk.
Each month I get paperwork from the City of Prescott and the State of Arizona. And by the 20th of each month I have to send in a check with the paperwork for sales taxes. The state gets 6.35 percent, and the city gets 2 percent. I have the privilege of collecting it for them. I even have a license that tells me it’s a privilege. It’s called a “Transaction Privilege Tax.” I have the license hanging on my wall for all to see (you have to do that).
So, this month I got a notice in the mail along with my State Transaction Privilege Tax paper work (I just love the word privilege in this whole thing) letting me know that I’ll be needing to pay a renewal fee for my “privilege”. Now, this is new. In addition, the license fee is going up.
I’m pretty clear on what’s going on. The State is short on funds. Spending like crazy during the boom period governments across the country created insanely bloated budgets and tacked in everything under the sun. And now during a downturn the tax rolls are looking a little light. Rather than rolling back the dumb stuff, they instead threaten things like schools, fire and public safety, and the rest. There’s nowhere else they can cut things in the budget…… uh huh.
Unlike the federal government, the state governments can’t print money at will. Instead, they’ve got to increase revenue somewhere. I know…..squeeze the small business owner. That sounds like the smart thing to do. After all, small business owners like myself have tons of cash to lobby the government…..Oh, wait…….
I mentioned fire departments and schools above for a reason. For while I’m now getting stuck with another bill from the State of Arizona, the city of Prescott is voting on a new proposition. It will temporarily increase the City Sales Tax from 2 percent to 3 percent. That means when you come into my gallery you’ll be paying 9.35% sales tax instead of 8.35%. Each city is different in Arizona. So, sales tax varies from city to city. Odd, but true.
Now, in my mind 8.35% is pretty nuts already. Coming from New Hampshire, with no sales tax, I keep having to remind myself when I make purchases that there’s an extra fee. It’s a fee that I now have the privilege of collecting as a business owner, the privilege of doing the accounting on behalf of a government entity, and the privilege not to get compensated for acting as tax collector.
So, in a few short weeks we’ll see if the new city proposition passes. The 1% increase will go to schools and other good things. And it’s temporary (have you ever seen a temporary tax increase). Ummm hmmmm. Living here for three years I’ve gotten the dirt on stuff that’s gone on in city government, I know about the mis-allocation of funds that were slated for a prison, and the temporary tax hikes associated with all of that. Too many small business owner friends have told me all about it.
In the end, I’m not foot loose and fancy free. Gotta make sure my accounting is right every month too, otherwise I’ll get in trouble. So, I work for the state for free, and can suffer penalties if I don’t get the job done right.
Apologies for the quasi rant here folks. Seeing the Prop 100 vote yes signs everywhere (if you vote no you hate kids and other good public services) has made me worry that running a near 10% sales tax could hurt business. Then reading that I get to repay for my license (for mysterious reasons) really got to me. I mean, I’m struggling already. Anything that increases prices and puts off potential customers can kill a small business. Don’t believe me? Then you haven’t been watching the economy over the past few years.
Oh, and our sales tax rate is higher than that of my old neighboring state, “Taxachusetts.” That’s a real bummer, and kind of embarrassing.