It was my intention when I first decide to do this blog to give people a snapshot of the idea of running a small restaurant business in New Jersey.
So now I'd like to give a bit of insight to a small part of doing business: TAXES.
The tax man comes for everyone; doesn't matter whether you're a doctor, sales clerk, accountant or restaurant owner. When you mess up your taxes, you get fined and penalized. But what happens when the tax man messes up?
You get fined and penalized for his mistake.
Today I got a letter from my payroll company:
"As you know, last year the state of New Jersey defaulted in its Unemployment Loan from the federal government. This year, the state is trying to pay the interest. Therefore, every employer in the State of New Jersey is being assessed interest fees for 2012.
"These fees are being billed directly to the employers and are valid assessments due. They are not part of the payroll process and we cannot automatically determine the amounts due. As a result, we are telling clients to pay these invoices directly."
No, I didn't realize that the State of New Jersey defaulted on their loan—not my loan, their loan. And no, I didn't realize I had to pay their bill. Why am I paying the interest on their loan? Who is going to pay the actual loan? When?
I pay biweekly payroll taxes, plus quarterly payroll taxes, plus sales and use taxes, plus healthy and safety taxes, plus property taxes and all my personal taxes.
Now they're telling me that on top of paying all those taxes on time—because I can't afford to be late with the amount of fines and penalties they charge—I have to pay the bill because the state was late with its tax and loan payments.
This is not like when the cost of business goes up. I can't pass this bill on to my customers. They won't stand for it, and will go somewhere else. So why should I stand for it? Who do I pass the bill to?
If the price of scallops or beef go up, I have three choices.
- Raise prices and risk losing customers.
- Take the food off the menu and risk losing customers.
- Suck it up, tighten my belt in other places, and wait until things balance out.
Small business owners usually take choice three first, then choice two, and finally choice one. What choice do I have with this tax bill?
How is this fair? This is not a Republican or Democrat problem. This is a system problem. The system's broken and it needs fixing. The little guys like me can't keep paying for other people's mistakes.
Fred Kellermann is the owner and chef de cuisine at Elements Cafe in Haddon Heights. He is also the president of SJ Hot Chefs, and urges you to support your local restaurant with your dining-out dollars.