Your Opinion: Paying for privilege of doing business
Wednesday, January 16, 2013
You know what my favorite thing about the New Year is? It’s that wonderful letter I get from the City of Jefferson where they thank us for conducting business in Jefferson City for the past year. They go on and on about how thankful they are that our business has collected and remitted thousands of dollars in city sales tax and hotel lodging tax and how they are really grateful for the local jobs we provide. It just feels so good to be appreciated.
Oh wait, that’s not what they sent me at all.
Instead, at the beginning of every year they send me a letter requesting that I send them $102 so I can have a business license that is “necessary” to conduct business inside the city limits.
So let me get this straight: I have to act as your tax collector for a calendar year. I have to pay credit card processing fees on the money I collect for you. I have to mail you a check by the 20th of every month. Then, you ask me to pay you $102 so I can do it all over again this year?
I’m not sure if you’re aware of this but credit card processing fees for companies that have many small transactions, such as hotels, are set up to charge a percentage of the transaction rather than a per transaction fee. When someone checks out of our hotel your sales tax and lodging tax are included in that transaction. So, lucky me, I got to pay in excess of $1,700 in credit card processing fees last year to collect city sales tax and lodging tax alone. It’s also important to note that we are a very small business in comparison to other businesses in the city. In other words, there are a lot of other folks getting beat down a lot worse by these fees.
The numbers: The City of Jefferson collected $197,870.85 in business license fees. Those businesses generated sales and were then forced to collect $9,327,157.36. They have even bigger goals for us 2013. This year they are planning on taking $233,800 from local businesses and they even upped our sales tax generation/collection goal to $10,165,003.
In closing, I really want to thank City Hall for the opportunity to pay them $102 so that I can continue to do a bunch of work for them.