The presidential candidates are talking about a Gas Tax Holiday.  After all, anything to help out the consumer, right?  Here’s another viewpoint.

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At one time my little business, Senior Ease, was a store in Fairlawn Plaza. Barcodes were still fairly new, and we didn’t use them. I paid a rather large amount of money for a nifty cash register that could be programmed to do many things. It took some time, but I finally entered the name of each item we carried along with its item number and price. Then I told the machine what the sales tax rate for Topeka was, and we were all set to go.

 

When we rang up a purchase, the clerk entered the item numbers for the customer’s purchase, and the machine did the rest. It totaled the price of the items purchased, figured the tax and added that amount, and told the clerk how much change to return to the customer. It printed out a spiffy piece of paper telling the customers the name of the products purchased and giving all the financial data. It even printed my cute little thank-you message at the bottom of the receipt.

 

If I remember correctly, the tax rate changed once while I owned that store. I had to get out the programming manual to do it, but I changed the tax rate the evening before the new rate went into effect. It took me about 3 minutes.

 

That cash register worked very well for us, and is still working well for the business that bought it from me.

 

Every year there is talk in the Kansas legislature of proclaiming a Sales Tax Holiday. This sounds like such a good idea that it is almost irresistible to lawmakers. Who, after all, could be opposed to a day in which consumers would not be required to pay sales tax?

 

I could. I am.

 

In the September 12, 2006 issue of KsSmallBiz.com we published a thoughtful article by Jonathan Williams, tax policy fellow with the Flint Hills Center for Public Policy, in which he presented sound economic arguments against this burgeoning practice. It is not my purpose here to duplicate his efforts. Rather, I am concerned with the virtually insurmountable logistical problem such a day would present to small retailers.

 

Typically, these Sales Tax Holidays take place on one day or over a weekend toward the end of summer, and are intended to give relief to consumers shopping for school supplies. Items exempted from sales tax are usually clothing and supplies costing less than $100 each.

 

How to determine which items are exempt and which are not is a problem we won’t touch here. Suffice it to say that on one web site I visited, a web site touting and explaining the proposed sales tax holiday for another state, belts with buckles were tax exempt, but belt buckles were not. Baseball and football jerseys were tax exempt, but football pants were not.

 

It’s true that my little store didn’t carry anything that could remotely be considered school supplies, but we did carry clothing. If the Kansas legislature had declared a Sales Tax Holiday while my store was open, I would have had to reprogram my cash register before every purchase of clothing. If the customer had purchased, let’s say, both a dress and a walker tote, we would have been required to ring them up separately and reprogram the cash register between the two items. I don’t see a way around that, since the web sites I visited make it quite clear that it is a criminal offense for a retailer, on the Sales Tax Holiday, to charge tax on exempt items or fail to charge it on non-exempt items. Or maybe we could have purchased a second cash register for just that day.

 

I have written before that it ought to be possible to open a small business with nothing more than a product or service to sell, a pad of paper and a pencil, and a cash box. Foolhardy, perhaps, but possible. It is not acceptable for the legislature to enact laws that make it impossible to conduct business without investing in technology.

 

Interestingly, in this case, a merchant with nothing more than a cash box and a calculator would fare better than a retailer with a cash register like the one I had. For all I know, the more sophisticated systems in use by large stores can be programmed to handle an idiotic idea like Sales Tax Holidays. It’s the countless small Kansas retailers who would be tempted to not even open the front door that morning.

 

The politicians who advocate inflicting this dreadful idea on the small business community might be able to convince a few shoppers they have kissed a frog and are handing the consumers a handsome prince.

 

The businesses that are left floundering around in the pond scum see it very differently.

KsSmallBiz.com, October 2, 2008

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