Monday, January 31, 2011

Small Business California Survey

We have received around 500 responses to our survey and it appears the small business community of California is more optimistic than the results we received last year. It also appears more of you will be hiring in 2011.

The one question I would really like to get your thoughts on is the Internet tax.

42% support it and 49% oppose.

Quite frankly I don’t understand this. Under current law when you buy from a store located in California the seller collects the sales tax. When you buy over the Internet the seller collects the tax if they have a location in California but if they have no location the buyer is required to pay a use tax equal to the sales tax.

Now I fully understand most business people don’t report the goods they have bought over the Internet but they are breaking the law and the Board of Equalization is getting very aggressive going after businesses not reporting and assessing penalties and interest.

My company CAL Insurance received a letter from BOE and we spent hours going over our receipts for 3 years.

We did find a couple of items in our thousands of receipts where we had inadvertently not reported the purchase. The amount owed was about $600 and we paid penalties and interest of about $500. I would have much preferred that I be charged at the front end saving me the interest and penalties but more importantly the time in going over our records.

Could the people that were against the Internet tax please explain why?

Thank you to all that have completed the survey. If you haven’t please take about 7 minutes to do so.

Please see link below.

Scott Hauge
Small Business California
2311 Taraval Street
San Francisco, CA 94116

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