Letter to the Editor: Local Businesses Are Taxed Enough Already

by | Jun 11, 2018

By Matt Wronski

My wife and I, with our two small children, moved to East Greenwich in November 2000. In that time we have loved every moment we have spent here – so much so, we stuck around long enough to open two businesses while watching our kids grow up to be young responsible adults, greatly influenced by all those involved in their education throughout the East Greenwich School District. It seems for many of those years, even through the terrible years during The Great Recession, we all were on autopilot when it came to running the town. Things have changed and those changes have been chronicled at great length. We are looking for answers to very difficult challenges. The answers are not easy to formulate. Solely cutting expenses will not be the easy fix, nor will solely increasing revenue be the silver bullet. I recommend treading carefully when considering options on both sides of the expense/cost equation. As a former business owner in East Greenwich, I believe I have a insight, which all EG business owners share, that not all those who are evaluating our current dilemmas possess. I no longer have skin in this game on a number of fronts. First and foremost, I no longer pay for the permits required or for the taxes levied on all businesses here. Before looking at the perceived Golden Goose for additional revenue, Main Street and businesses in East Greenwich, I’d like to shed some light on to the financial responsibilities these businesses shoulder. As anyone who has seen this town change over the last two decades can attest to, we have all seen a myriad of businesses come and go. While a lot of these businesses weren’t well thought out from their inception, others just couldn’t get out from their financial responsibilities on a local, state and federal levels. Before consideration of additional financial constraints on local employers, I wonder how many residents are aware of what is currently required? As I mentioned previously, I no longer have a horse in this race. These are the taxes and permits, all of which require a fee, I can remember off the top of my head from my days of owning restaurants.  

RI Corporate Tax – Levied on every incorporated entity in the state.

RI Inventory Tax – A yearly inspection which yields a tax on all fixtures, furniture, equipment as well as inventory. While the state sales tax is levied only once when these things are purchased, all these items are taxed again and again throughout their use by the business.

RI Payroll Tax – Not to be confused with state income taxes withheld from all paychecks, this is an additional tax employers pay, merely for having employees.

RI Unemployment & Temporary Disability Tax – Otherwise known as TDI, this is the employers contribution to pay into the TDI fund, over and above what employees contribute. 

Tax on Utilities – Unlike residential accounts, businesses pay sales tax on all fuel purchases – heating, cooking, cooling. Electricity, natural gas and propane all are delivered with the 7 percent sales tax attached to the bill.

Victualing License – Yearly permit from the town for any business selling food items.

Litter Control Permit – One of my favorites – this money is earmarked to clean up litter. Any business that sells food items which may come in wrappers is required to have this, including restaurants, convenience stores, grocery stores, gas stations, etc. It is based on gross sales, the higher your sales, the higher your tax. I’m not real sure where or how this money is actually allocated.

Dept Of Health License – Permit from the Rhode Island Health Department.

Liquor License – License from the state, though East Greenwich also allows for additional licenses granted with Town Council approval.

Fire Department Permit – Yearly inspection with permit.

Hot Water Heater Permit – Another one of my favorites. Yes, if you have a hot water heater in a commercial building, it needs to inspected, permitted and taxed on a regular basis. It was once yearly but that was changed and the fee was disproportionately increased.

Federal Corporate Tax – Levied on every incorporated entity in the country.

Federal Payroll Tax – Just like the State Payroll Tax, not to be confused with federal income taxes withheld from all paychecks, this is an additional tax employers pay, merely for having employees.

Social Security Tax – Employers contribution to their employees Social Security fund.

Fuel surcharges on deliveries, not a government tax, are placed on invoices when gas prices spike. I have no doubt, with the newly implemented tolls on trucks, additional surcharges are likely. A lack of choice in the required Workers Compensation Insurance makes shopping around for Workers Comp Insurance impossible – the cost of this insurance is determined by gross payroll amounts. Minimum wage increases, which will have the effect of increasing labor costs across the board, will also hike this insurance cost. Though Smith Hill doesn’t directly control the three things I just mentioned, their actions certainly do. 

East Greenwich is obviously a destination for entrepreneurs seeking to profit, and thank goodness it is. Most entrepreneurs who venture here to stake their claim are not successful – this is the nature of business. I can remember far more businesses on Main Street that did not succeed than I can those that thrived. I sincerely hope the environment encouraging people to come here is not stymied, taxed and permitted to the point these individuals take their hopes, dreams, aspirations – and tax revenue – elsewhere.  

Photographer Matt Wronski, with his wife Dana, founded Greenwich Bay Gourmet and Tio Mateo’s. 

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