HB 1516 looks like a grab for votes
House Bill 1516 sounds like just the thing for budding entrepreneurs around the state. Start the business of your dreams, build the better mouse trap and the state will help shore up your bottom line by exempting your new business from the state B&O tax. Should the state be exercising its clout to assure a start up makes it to year six?
What about the eight-year-old business that suffered through the first five years, never turning a profit, dutifully paying its B&O tax, and is still here to complain about it? What about the third generation business in its 79th year that has dutifully paid the toll since it was enacted? Is it really so easy for them in their "advanced" years to paint the bottom line black? What is it about new businesses that make them deserving of a break from the state? Is it that they’ll employ more workers than existing companies? Is it that they somehow deserve the state’s sympathy? Is it that the state knows they have a huge surplus and the legislators are all looking for supporty from the small business community and have determined this is the best way to get the small business vote?
There is no question but that small business has been responsible for creating the lion’s share of jobs in the state for years. Small business has been the author of many of the innovations and inventions of the last decade and the entrepreneurs responsible for them have all paid B&O taxes to the state. Who is the legislature trying to protect? The market is the master to every small business person. In the end, it is the market that decides if the start-up is appropriately targeted, organized, capitalized and managed. Alleviating the need to pay the state B&O tax is not going to be the difference.
And what of the businesses who will simply become "new"? Yes, the bill attempts to protect against this nefarious activity, but the reality is that it cannot guarantee it won’t be abused. It is foolish to legislate that which is virtually impossible to police.
If the legislature were proposing abolishing the regressive B&O tax altogether, we would support that. But this is legislation that smacks of sponsors looking for a way to grab votes.
Beware of wolves in sheep’s clothing. While this appears to have the needs and concerns of small business at its core, nothing could be farther from the truth. This is bad legislation, an unfair business practice and not one that should be supported by the majority of the legislators. Call and let them know you have enough competition without the state unfairly supporting the upstarts.
