Small businesses in Florida perform an excellent job for the state. Small businesses provide jobs, supply the services and goods that consumers require, and collect and pay sales tax to the government.
The process of remitting sales tax revenues isn’t as simple as it appears and is among the reasons why when the state audits an unproficient business, There’s a good chance it’s related to sales tax.
Gov. DeSantis is enacting a bill, and the State Tax Audits for small-sized businesses could become significantly more complicated. The penalties will increase, and the capacity of small-scale entrepreneurs to protect themselves will be severely hampered. Small business owners will not be able to present additional evidence following the initial audit to show that the tax estimate provided by the state is inaccurate.
This is why small-business owners are calling on Governor. DeSantis to block Senate Bill 1382.
In this legislation, the state would automatically conclude that the small business owner was negligent when their accounting records were insufficient. This would cause a 50% penalty in addition to any tax liability the Florida Department of Revenue had already estimated. If you make an honest mistake, the government will believe you are cheating and make the taxpayer pay more.
S.B. 1382’s extreme and harsh method will be unfair to every taxpayer across the state. It is especially difficult for small businesses that are already struggling with the epidemic, a shortage of workers, rising inflation, and an increase in the cost of fuel.
Smaller businesses typically do not have tax attorneys or accountants employed to address these issues. In reality, 58% of small-scale entrepreneurs handle their bookkeeping instead of using a tax professional. Most often, the person charged with accumulating receipts and justifying each sales tax dollar is the same person who cleans the garbage and is the person who runs the company.
The state examines the audits of tens of thousands of small businesses each year. The time spent collecting documentation to satisfy auditors’ demands for documentation is an opportunity for the owner to not concentrate on running the company, and that’s money that the business owner cannot afford to lose.
With everything they have to do and the demands of their jobs, it’s no surprise that small-scale businesses often overlook an element when collecting sales taxes. This is the reason why S.B. 1382 is so offensive.
If S.B 1382 is enacted into law, taxpayers will not provide additional tax documents or other evidence uncovered after the initial audit. If you’re audited and find documents that prove you have paid the correct amount, the government wouldn’t even bother to look it up.
That’s outrageous. It presumes that you’re guilty without allowing you to prove your innocence. This is unfair.
There are usually valid disagreements between small-business proprietors and the Florida Department of Revenue. The owners should be able to protect themselves.
Small businesses are the core of the Florida economy. According to estimates from the federal government, 99.8 % of all companies that operate in the state are small firms, and they employ more than 40 percent of the workforce in the state.
Small business owners are urging Governor. DeSantis to stop this bill and instruct his Department of Revenue to focus on calculating the amount of taxes that small companies already collect and pay to the state.
Bill Herrle is the Florida executive director of the National Federation of Independent Business.
