Tweet

Is Your State This Business Friendly? You Be the Judge

Guest post by: Scott Gregory

Article Overview: Many states talk a lot about being business-friendly. In many cases, their actions speak much louder than the words. This post provides some compelling insight and real-life example of where the theory and the reality separate in a hurry.

Is Your State This Business Friendly? You Be the Judge

From the tales of the "sad but true" department... I recently became aware of a local small business that got not one, but two surprises in their mailbox from two different state taxing agencies. Actually, they weren't really surprises, but nightmares in an envelope!

The first letter they received was from the state bureau of unemployment advising them that their unemployment tax rate for the new year was increasing from .8% for the year to 11.8%.

You read that right...

Their unemployment tax rate was going from .8% to 11.8%. (that is from point 8 to 11 point 8!)

W-T-F?

You see, this business, like many others last year, had some turbulence in their cash flow during the year. They happened to make a late payment on their unemployment taxes during the quarter that the state set their rate for the next year.Once that happened, they got caught up in the machine.

Be aware - they did not skip the payment. They paid it in full about 60 days late when cash became available and they also paid the interest that was billed to them for the late payment.

IT GETS BETTER...

Shortly after they had that little explosive dropped into their cash flow planning, they received another letter from the state bureau of workers compensation.

Because one of their payments was 60 days late during the year, this business was told they were being dropped out of their group rating program for workers compensation for one year.

Important note - the state allows you to be 59 days late, but not 60. If you hit the magic 60 days, lights out.

Like the unemployment situation, the late payment was ultimately made in full on the 60th day. The business was not a habitually late payer for either of these tax programs.

End result of this little snafu?

Their workers compensation rate INCREASED 450% for the new year.

THE APPEALS ARE UNDERWAY

Naturally, this business has begun the appeals process with both state agencies. They have already lost the first round of the workers compensation battle.

Why they lost? Because the state is so far in debt, that they passed a law last year that said these penalty rates are in place for a year when late payments are involved. Few, if any, exceptions to be granted. Too bad...so sad.

MORAL OF THE STORY: Don't be late on your payroll taxes. Ever.

Oh, and by the way, are you wondering what state this is? Hope so..

If you do business in the state of Ohio, you could be next...

Related Articles
  Etiquette in TV Court
  Stopping the Runaway Train in Triplicate
  Illegal Workers Protected by FLSA
  It’s my judgment, so it must be right!
  Marketing With Eco-Friendly Brochures

Article Tags: late payment of payroll taxes, Ohio tax department, payroll tax penalties



Related Forum Posts
Re: Did you reach your goal this year? - Turns out there's 5 meeting locations for Toastmasters International in State College alone... only 30 minutes from my town. Most likely due to Penn State University, but surprising nonetheless that I have never heard of the organization before. I'll have to look more into it as it sounds like something I could benefit from.
Do I require Business License? - I'm in the business of a "web 2.0" development. The main revenue will be from advertisements. Do I require to obtain a State Business License? or something else more nationwide (if there is such a thing) since I will not only be providing business for Nevada advertisers but all over the US?
Re: Did you reach your goal this year? - [quote="Alan Mater":35bhlot8]Turns out there's 5 meeting locations for Toastmasters International in State College alone... only 30 minutes from my town. Most likely due to Penn State University, but surprising nonetheless that I have never heard of the organization before. I'll have to look more into it as it sounds like something I could benefit from.[/quote:35bhlot8] There are lot of things we never heard of before until someone tells us. This is why I like this forum, the information we get here are priceless
Do I require Business License? - I went ahead already and formed a (C) Corp. and will attempt to form an (S) Corp for tax purposes. Thanks for the input guys but i wasn't very clear on the question itself. I was a little confused about obtaining my business lic. Because since my revenue is all Internet advertising based, there will be companies located outside of Nevada to conduct businesses with us. Now will a State Business Lic. Be sufficient or is there some kind of nationwide business lic perhaps I don’t know about. Thanks in advance
My entry - 1. The Best Business Books Ever: The 100 Most Influential Business Books You'll Never Have Time to Read - this is a fascinating book about the history of Business theory, and I'd recommend it to anybody. 2. The Big Book of Small Business: You Don't Have to Run Your Business by the Seat of Your Pants, by Tom Gegax. Ditto. 3. PADI: The Business of Diving Book Okay, so this book won't be of use to anyone who doesn't want to start a scuba store, but I did, and this book was of course invaluable to me in reaching that goal.


Share this article with your friends. Fund someone's dream.

Leave a comment below or share on the left and you'll help support entrepreneurs in Africa through our partnership with Kiva. Over $50,000 raised and counting - Please keep sharing! Learn more.

Tweet

Newsletter

Get advice & tips from famous business
owners, new articles by entrepreneur
experts, my latest website updates, &
special sneak peaks at what's to come!

Name:
Email:

Popular Articles

Ways to Improve Your Landing Page Conversions

Do You Pretend To Listen To People?

Suggestions

Email us your ideas on how to make our
website more valuable! Thank you Sharon
from Toronto Salsa Lessons / Classes for
your suggestions to make the newsletter
look like the website and profile younger
entrepreneurs like Jennifer Lopez.