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The Cost of Doing Business in New Jersey

The tax man comes to dinner...again and again and again.

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.

  1. Raise prices and risk losing customers.
  2. Take the food off the menu and risk losing customers.
  3. 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.

This post is contributed by a community member. The views expressed in this blog are those of the author and do not necessarily reflect those of Patch Media Corporation. Everyone is welcome to submit a post to Patch. If you'd like to post a blog, go here to get started.

Paul J. DiBartolo June 25, 2012 at 11:55 PM
There's one more tax you can pay...the $5.00 bridge toll as you're leaving the state...for good. I don't think too many here would blame you.
Chef Fred June 26, 2012 at 12:09 AM
Part of the reason for doing a blog is to engage in conversation, obviously you can't offer any.
Ric June 26, 2012 at 01:09 AM
. I understand you conundrum. You are being asked to pay because an agency of the state did not pay its obligations - probably because its funds were drained by NJ's unemployment rate topping over 9% (the highest in the region). As Christie will be running for reelection, I do not see him helping out. He is all about reducing income taxes and there is no glory for him lowering payroll taxes. If NJ can ever get its people back to work, the payroll tax situation should improve for you. The only saving grace is if you are subchapter S, you will pay less federal taxes because you are paying higher payroll taxes. It won’t be a wash but it will be a little help.
Schu June 26, 2012 at 02:07 AM
We have to many people working for the State Government, combine that with all the public sectors workers who collect a salary and contribute very little who are owe a paycheck, benefits and pension and you have more takers than givers.
agent itchy June 26, 2012 at 11:22 AM
State government has been shrinking. In fact, since Corzine state govt has shrunk by about 6% while local municipal govt has grown by 14%. Under Corzine, a hiring and promotions freeze has been in place, and Christie has maintained that practice. The Dept of Environ Protection is about 1,500 employees fewer today than in 2005 and about half the size from the 1980's. The fact is that more is getting done by fewer people. Software, for example, has replaced dozens of positions and devices like remote monitoring systems have replaced inspectors. Home rule? that's another story. Just research other states and name one with more municipal government per capita than NJ. You can't because while you're bashing state workers, your property taxes is really what's choking you. 565 little fiefdoms and 600+ school districts all protecting their castles. Maryland, for example, has one district per county and one for Baltimore. I wish you much success Fred. I hope the next time you vent about govt. that you'll focus your energy on the towns next time.
Bill Bondar June 26, 2012 at 12:05 PM
I remember dining at your establishment when you first opened and wondered how long you would be in business. Not many business stayed long at that address. Kudo's to you for still being open and offering fine food. Keep up the good work. I don't live in that area anymore but will try to stop back for dinner sometime.
Paul J. DiBartolo June 26, 2012 at 12:58 PM
Yo Chef Fred, get a clue. You complained about all the taxes NJ puts on you...I was agreeing with you. BTW, when you talk about engaging in conversation are you referring to the kind of comments your blog on Italian food elicited? If you can't stand the heat, Fred, maybe you should get out of the kitchen.
Ric June 26, 2012 at 01:16 PM
Paul it is not Chef Fred that needs a clue. You ought to reread what you said. LOL! To paraphrase you, if you can't stand the responses maybe you should get out of the blog!
Paul J. DiBartolo June 26, 2012 at 01:47 PM
Hey Ric, maybe you and Fred missed the most telling sentence of my reply..."I don't think too many here would blame you." Do you understand the meaning of those words, Ric? Again, the criticism was aimed at NJ and I was telling Fred he should avail himself of the final tax, and no one would think any less of him, and leave because just like our government levies a death tax against us when leaving this world so does NJ tax us when leaving the state; kinda like a last 'gotcha.' The pool of people who would voluntarily want to stay in NJ is getting smaller and smaller. And, BTW, Ric, based on the manner in which some of your comments have been worded I'm not sure you have any room to talk.
Chef Fred June 26, 2012 at 02:13 PM
Paul, What you wrote is not what you are saying now. I took it to mean I should stop complaining and leave. If you are agreeing with me it is difficult to tell. But I should not have to leave an area I like because our elected officials can't follow the rules we should make them be accountable. On a side note, everything I have read that who have written comes off as angry, it makes it difficult to understand your true meaning.
Ric June 26, 2012 at 02:52 PM
Hey Pompous Paul, stuff a sock in it and learn how to write clearly. You do know how to learn, don't you? By the way, are you still seeking legislation that outlaws plastic guns?
Paul J. DiBartolo June 26, 2012 at 03:26 PM
There you go again, tricky-ricky. You're just so bright, Ric, we're just blinded by your illumination. Spare me the pontificating. Have a great day.
Paul J. DiBartolo June 26, 2012 at 03:38 PM
Fred, I totally agree with you. You should not have to leave an area but our busybody government types make it impossible for anyone to make an honest living and I feel for you. Again, I stand by my comment which was sarcastic, but not towards you but towards the state. Thus I suggested you pay the final tax at the bridge and get the heck out of Dodge and let the genius 'gubmint' types figure out how to run a state when 'everyone has gone to the moon.' And finally, I repeat, "I don't think too many here would blame you" if you picked up and left. Sorry for the misunderstanding.
Matthew Steffen June 26, 2012 at 07:36 PM
This is a great post! Would you mind if I added it to our NJ small business marketing blog, and gave you full credit as well as links to your website? I have been trying to write about NJ killing business owners with taxes for some time, but you have expressed it much better than I ever could.
Chef Fred June 26, 2012 at 08:15 PM
Paul, Thanks for clearing things up.
Chef Fred June 26, 2012 at 08:17 PM
That works for me. Contact me directly at the restaurant if you need anything else.
Chef Fred June 26, 2012 at 08:18 PM
Thanks for your support. Always appreciate a customer.
Chef Fred June 26, 2012 at 08:26 PM
thanks for the info. Just seems like I'm robbing Peter to pay Paul. And as far as people going back to work, I believe that there are people truly and honestly looking and working hard to find a job. But I also believe that when they extended unemployment benefits a couple of years ago to as much as or more then 52 weeks people starting taking advantage of the system and in turn the people that are supporting the system. I'm a firm believer in the idea that we don't need new laws for everything, we just need to enforce the ones we have and not let our elected officials off the hook. And by the way for anyone that does not know, an employer is legally obligated to pay unemployment taxes and legally barred from collecting unemployment benefits. At least as far as it was explained to me.

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