Why I am moving my business out of Augusta County over $374
My name is Cole Scrogham and I am a small business owner in Augusta County. My small business provides consulting and management services to Motorsport companies all over the US and Europe, and I have a home office that I use as my headquarters.
I am a longtime resident of Augusta County, and have recently come to the conclusion that the business environment toward small business is so poor here that I must make a change. If you care to know why, please read further, but as I have found with most government officials, elected officials and constitutional officers you may likely stop here and that’s ok too.
My main issue is the business license tax and collection of that tax, although there are some periphery issues as well. I am not sure if you are aware, but a new business owner in Augusta must pay an estimated tax up front to procure a license, and then the next year’s license is based on anticipated earnings from year 1. I am quite sure the intention is by year 3 or 4 the income flows will smooth out and the tax becomes more stable, but for someone trying to start out this is an extra burden, not to mention from several court cases on taxation of future earnings possibly unlawful.
I was told this is the only way that the County can stay “ahead” of the tax, in case the business fails or moves they always have a year in advance. What this practice really means is that new small businesses are being taxed on anticipated and not actual earnings, and the burden of payment becomes that of the business owner and not of local government, which is certainly not a “business friendly” practice. I have a policy suggestion, give all new businesses in Augusta County a “provisional” license for $100 and then base the gross receipts business license tax of .30 per $100 on actual income the next year rather than anticipated income in the prior year. In my case, income has dropped significantly, yet my tax has not. I think that the County can afford to potentially lose some income from a failed business, in order to extend a real message to business owners that they are welcome and appreciated in our community.
Another related issue brings me to my personal situation. I have had a running disagreement with the Augusta County Treasurer and Revenue Office over what I believe is an incorrect evaluation of business license tax for about a year now. I contended that my estimated income would decrease and took appropriate steps to reduce my Federal and State quarterly taxes, as well as the County business tax. I sent the Revenue office my business license payment based on this revision, along with a letter that I did not think it was very fair to tax someone based on their anticipated earnings and would either send an additional amount or a refund after year end. I also sent a letter to my County Supervisor Marshall Pattie but heard no response.
My explanation was apparently not acceptable to the Treasurer Mr. Homes, and after three attempts to contact via phone and letter all I could get in response was a letter effectively saying “pay your taxes.” I have never known an agency that was more non-responsive, either in the private or public sector. If the Treasurer’s office was in the private sector, they would be out of business. We could not create a simple solution even though I paid what I anticipated I would owe on June, so the Treasurer’s office recently and out of the blue placed a lien on my accounts (personal and business as well as any co-account holder) for $347 after I had not heard from them for several months. I paid the tax in full today under protest, although I am quite sure I will be getting a refund on that amount, only because I had no choice in order to have access to my accounts and my family member’s accounts as well.
As a policy suggestion, I would instruct my lien person to NEVER attach a lien unless I called the small business owner first with maybe 24-48hrs notice before attaching the lien. I only received a letter after the fact, which meant I had no means to “fix” the crisis before it was too late, I found out when my son and wife called in a panic that there accounts were frozen. You may be saying to yourself, “pay your taxes on time” and that would solve the problem, but lets face reality for a moment. The last time I spoke to anyone from the County was months ago, and I left it that I would get a report from my accountant and settle up after the first of the year if I owed anything more. In the meantime, small business owners are the labor, marketing, finance and person answering the phone with precious little time to argue over $374. The County, however, apparently employs extra people just to make sure every penny comes into their coffers, and ahead of schedule at that. I don’t have resources to hire extra people so I can ensure compliance on every small issue like the County does, no small business can, small business owners need extra help from local government officials not less.
In the end, I had to go to the Treasurer’s office and pay with cash, like I was a common criminal, even though there were funds available in my account. This is another reason I do not believe that the current Augusta County tax policy for small businesses, especially new ones, contributes in any way to being business friendly. I have been treated as if I am the antagonist when I ask simple questions of clarification, and yet never once belittled any County agent or even raised my voice. I have been bullied into making a payment that I think is erroneous, and embarrassed with my bank and peers. In effect, my accounts have been frozen in order to pay taxes on funds that I haven’t made yet.
I hope that you will take these suggestions seriously, they may help the next business owner that wants to start something new and exciting in Augusta County. It won’t be me, however, as soon as I find an office location elsewhere I will be moving my business out of Augusta County…over $374.
– Letter from Cole Scrogham