Rhody Going After “the Little Guy”
State tax officials have put more than 1,200 businesses across the state on notice this week that they are out of business unless they pay their overdue sales taxes immediately.
For most, that action came in the form of a personal visit from the state Division of Taxation, ordering business owners to lock their doors at once.
By Wednesday, a line of people had queued up inside the Department of Administration building on Smith Hill, waiting their turn to plead their case to a state revenue agent. Some were angry. Others frustrated.
“I understand the state needs money, but to put pressure on the small guy or the moderate guy that’s struggling, it’s not going to do any good,” said Mike Suriani, who owns an electrical supply company in South Providence.
In Suriani’s case, it may have been a bookkeeping error that landed him in the three-hour line. Suriani says he paid his taxes in full — albeit a little late –– and had copies of the cancelled checks from the state showing he had indeed turned over the sales taxes he collected.
But that didn’t keep taxation officials from appearing at his door Tuesday demanding that he close up shop.
“Yes, the rules state that we have a responsibility to pay our bills every quarter. But when your customers come in and they don’t pay you for a month, and then another month, and another month, businesses have no choice [in] the eyes of the state but to close up and get out,” Suriani said.
It’s easy to have a knee-jerk anti-tax reaction and the commentary on the story is widely against the state tax collectors. No surprise: who likes taxes? And we shouldn’t be surprised that bureaucrats show little or no empathy or compassion to those conscripted to do the government’s dirty work.
However, you have to think that some of these small businesses collected sales tax on behalf of the state and they actually haven’t passed that back as required. Like it or not–and I don’t–government dictates that business has to do the tax collecting (sales and income) for them. Easy enough to think it stinks and make comments about how RI stinks (presumably along with the other states who collect sales tax?). But it’ll take major political change to alter the current tax system (like making people pay income taxes on their own).
So maybe this can be an opportunity to make a change. A tax revolt? Perhaps. More likely, it could be a key issue for electing reform-minded politicians in 2010. We’ll see. But if nothing is done, then all we’ll have is a little righteous indignation and the status quo.