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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.

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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