Proposed Tax Could Cost Businesses a Pretty Penny

penny-tax

By: Jeff Smoley

The proposed penny tax isn’t just a penny increase, it is a penny per dollar – or one percent, up to the first $5,000.00.This works out to just under an 18 percent tax total increase.

At the Penny Tax meetings, those that work in city government denied this, but basic arithmetic proves it.¬†This puts an undue burden on the lower income residents of Broward county, however, this isn’t the really bad part.

What is the real issue is the cost to small businesses. If the tax is passed, it is scheduled to go into effect less than two months later on Jan. 1, 2017. At that time, every business that uses point of sale software (POS) will need to contact their software vendor and request that it be customized for this tax. Most companies will likely say okay, but there will be a cost involved, ranging from hundreds to thousands of dollars, especially due to the short time involved. Other companies may tell businesses they can have the customization, but it will be available in the next release (Microsoft does this all the time). The next release won’t be before Jan. 1. ¬†Thus, these companies will need to purchase new software, have the data converted from one system to the other and have their employees trained on the new program. This costs money too. Those companies that don’t have in-house accountants will have to request their accounting service company customize their software too. Besides the POS programs, most companies have a back end accounting program. This program will also have to be modified. The modification to any software may not take that long, but the proper testing and Q/A process does.

Who do you think will have to pay for the costs of all this?

Probably the consumer. Many will just drive the 20 minutes to the south end of Palm Beach County to purchase their more expensive items, thus loosing customers for Broward businesses.

Lastly, the state, county and cities will have to have their accounting systems customized/modified to handle the new tax. This should work out really well, just like the new permitting program that Tamarac put into place and it now take three to four times as long to get many permits.

Verdict: Scrap the tax.

Jeff Smoley is a retired engineer who worked in the computer field for 28 years for such companies as Computer Systems, Inc., Televoice, Inc., US Robotics, Inc., Mercator, Inc., Ascential, Inc. and IBM. He has worked with CPM, DOS, Apple, IBM, AIX, Solaris, HPUX and Linux systems and networks.