A. politely explaining to me why I am crazy and need to simmer down, or
B. giving me a little emotional support and climbing up on that soapbox with me!
Okay, we have a small public educational institution within the State of Indiana as a client. They hired us a few years back to do a campus map, then we didn't hear from them in 2+ years after successfully completing the initial job (went well, got paid on time, etc.). Then, that same institution calls us up this summer with a "rush project"......updating their existing map in time to meet a press deadline. No big deal, happens all the time around here. We tell them "sure, no problem!" as this is a very common request from clients, particularly in the summer as they are all gearing up for September 1 and the opening of classes. We finish the job and the client is happy. We send them an invoice for less than $200 for 3-4 hours of work.
30 days pass.....no payment. Not entirely unusual, as more than a handful of public institutions require about 3-4 extra hurdles and an expert knowledge of Origami in order to process an invoice. 60 days pass.....no payment. I send our contact a friendly email, asking her to check on the status of payment. A week later, I get a copy of a re-issued P.O. for the project. Okay, NOW we'll get paid on our rush-job, right? Wrong. 90 days pass.....no payment. Now today, about 115 days since we delivered the finished project and 85 days past due on our invoice, I get a letter from the Indiana Department of Revenue. They tell me that we have "outstanding Indiana sales/use tax liabilities" (?) and that they have filed a "protest against your recent or upcoming contract" (freezing payment) because our firm isn't registered for a retail merchant's certificate (nevermind that we don't do "retail" work). They also tell me that we need to complete something called a "BT-1 application" (probably for a fee...but wouldn't you know it? Their web site to access the application has been down all day, at least the URL on the letter they sent me.....unsigned without a contact person's name, just a big, nameless/faceless department and the number of a switchboard operator).
Here's the kicker though: they say we have to register to collect and pay sales tax in the State of Indiana if we want to collect payment on that job....AND they say in their letter:
Once you are registered for sales tax you will be required to file periodic sales tax returns even when you have no applicable sales subject to Indiana sales and use tax. Failure to do so could result in an estimated billing by the department.
So if I am understanding this correctly, one of the State's public institutions has been using our artwork for 3+ months, hasn't paid for it, and the State is likely going to CHARGE me to apply for the privilege to collect our <$200 invoice and make us file "periodic" sales and use tax returns.....sucking time/money away from other projects AND threatening to bill us if we don't file said "periodic" returns? They've apparently learned their lesson well from the State of Virginia, but that is an entirely different rant.
Here is where I REALLY wish that individuals could not get elected to state and local government (much less Federal office) unless they have some semblance of a clue related to economics. This is a poster-child of what is wrong with a lot of our governmental processes in the United States...as no one wins, and the only people who lose are ultimately the taxpayers of the State of Indiana. I'm sure other businesses who encounter this type of situation experience the following scenario:
1. Company does small amount of work for clients in the State.
2. Company is told by the State that they have to jump through 3-4 hoops and pay fees and fill out forms to get paid and do business in the State, in theory to generate more tax revenue and ease the burden of resident taxpayers.
3. Company tap-dances to appease the State, then makes sure to apply a healthy mark-up on any/all work done in the State's public sector going forward. A "nuisance tax", if you will.
4. Taxpayers of the State cover the additional shortfall (the difference between "nuisance tax" and mandated State fees).
If our local, county, state and federal officials would ever learn that these types of protectionist and bureaucratic practices do FAR more to hinder economic development and revenue than actually protect local interests, our cumulative governments could probably contract in size by at least 20-30 percent and actually free-up time for small business owners to generate INCOME TAX.....instead of trying to nickel and dime them to death, taking time (and money) away from their clients, their production, their sales and marketing efforts, their families, etc., we might actually get somewhere in this country. As it is, the lawyers and bureaucracies run our country....ruining it for the rest of us.
There, I've had my little rant. I'm giving SERIOUS thought to just saying "the heck with it", eating that <$200 invoice and telling our client to cease and desist from using our modifications (no pay, no usage rights). However, I'll probably "play nice" and call the Indiana Department of Revenue on Monday, jump through their hoops and fill out whatever forms that they require (assuming the fees don't exceed our invoice value, ). The thing that I find to be sad though is that, the next time a public institution in the State comes calling, how could I NOT at least consider inflating our prices to cover the added time/hassle/taxes/fees? It's sad that I would even have to consider it....as the State charging additional fees would only end up costing taxpayers MORE money in the long run. I just wish that ONE politician, someday, would have that "Eureka!" moment and see the light of day related to economics and government policy one of these years.......