1,200 R.I. businesses face closure over sales tax

By Cynthia Needham and Katherine Gregg
Journal State House Bureau
The Providence Journal

Thursday, July 30, 2009

PROVIDENCE — State tax officials have put more than 1,200 businesses across the state on notice this week that they are out of business unless they pay their overdue sales taxes immediately.

For most, that action came in the form of a personal visit from the state Division of Taxation, ordering business owners to lock their doors at once.

By Wednesday, a line of people had queued up inside the Department of Administration building on Smith Hill, waiting their turn to plead their case to a state revenue agent. Some were angry. Others frustrated.

“I understand the state needs money, but to put pressure on the small guy or the moderate guy that’s struggling, it’s not going to do any good,” said Mike Suriani, who owns an electrical supply company in South Providence…

…most standing in line Wednesday cited economic pressures and the constant fear of closure as the reason for their delinquency.

By 4 p.m., as Division of Taxation employees worked their way down the list, tensions were on the rise. A few in the 50-person queue made frantic calls to explain to vendors why their restaurants were closed for the day. Others ran out to feed expiring parking meters, while sweating over the lost revenue and embarrassment that appeared on their doorsteps Wednesday morning.

And then there was Pawtucket clothing manufacturer Jessica Bahl who, like Mike Suriani, said she didn’t owe any taxes at all. State officials closed her business Wednesday insisting she never renewed her permit. But in her hand she held a copy of the application along with proof that the state had cashed her renewal check.

“The economy is [terrible], people are hardly staying in business. I had to shut down my business for a day to come here and do this and they already got my check. So why am I here?” a frustrated Bahl said.

“And then they send someone over to scare me in front of my customers?” she continued. “It’s ridiculous … It’s embarrassing.”

Complete article here.

[Our note: The State of RI has approximately 34,000 citizens collecting some form of unemployment benefits. On 21 July the Journal reported that the state’s unemployment rated had climbed to 12.4%, the second-worst in the country, with just Michigan reporting higher numbers.

[In that 7/21 article Ross Gittell, vice president and forecast manager for the New England Economic Partnership, is quoted: “Rhode Island, he said, does not have a business-friendly image, and he pointed to the state’s tax structure, lack of skilled workers, and the poor reputation of its state and local politics.”]

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