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Sunday, May 1, 2016

Inventory tax may be repealed

Saturday, September 13, 2003

- Business owners push for removal of 'unfair' tax

It takes a lot to draw a large crowd to a County Commissioner meeting, but a proposed tax repeal did just that earlier this month. Several Clay County residents from all different areas of business came to the last meeting to express their wish to remove Indiana's Inventory Tax from Clay County, even though the actual proposition will not be voted on until next month.

Weeks have passed since the meeting, but many area business owners feel the same as they did before. They claim that the Inventory Tax is not only unfair to their practices, but damaging to them as well.

Marty Jaffe, CEO and President of the Brazil Autoplex, is one of the more vocal members of the coalition to remove the tax. Repealing it, he said, will not only help local businesses but the county's economy.

"This tax affects everyone, from the car dealerships to gas stations to the funeral homes," he said. "I'm not saying this because it will help my business out, which it will, I'm saying it because it will benefit the entire community."

Jaffe said that by repealing the tax, Clay County would send a business-friendly message and could draw more companies to the community.

"Think about it," said Jaffe. "There are huge warehouses in places that still have an Inventory Tax. If Clay County would get rid of it, who's to say that these places, which are huge employers, won't find their way to Brazil?

"This tax affects any place you can imagine," he continued. "The consumer is affected. The employee is. The owner is. The only people that are really unaffected are doctors, lawyers, people in the service industry."

Les Harding, Chairman of the Clay County Council, said that though the tax is state-based, special provisions have been made to allow counties to remove it.

"The state passed a law that gave counties the authority to repeal the tax," said Harding. "It will be removed statewide in 2007, anyway, so we've basically been given the opportunity to do it ahead of time."

Harding said that "almost everyone" he'd talked to has been in favor of repealing the tax, and many say it is unfair to businesses in the first place. He also stated that, in his opinion, "getting rid of any tax that you can get rid of" is good for a community.

"But there is a balance there," he continued. "It's a matter of keeping the public safe or saving everyone $30 or $40 every year."

Harding said that though the tax could be repealed, other taxes will have to take their places.

"Tax revenue has to be made up or lost," he explained. "But if the tax is repealed it will be replaced by other taxes that are a bit more fair."

Property taxes could be adjusted, he said, as could others, but shifting the tax load is "up to the state."

"Commissioners are only given then authority to remove the tax, not adjust others."

Though some cite that car dealerships will be the only businesses positively affected by the tax repeal, should it happen, community business owner Terri Stuart says that this is a false assumption. Stuart, who co-owns Stuart Oil Company and five convenience stores with her husband, John, says that the tax affects everyone on the consumer chain.

"A lot of people don't understand the full implications of this tax," Stuart said. "It has a greater effect than most people realize. If they'd look into it a little more they might realize that."

The tax, which is due on March first, is charged on all remaining inventory in an establishment's stock.

"I call it the 'trickle effect,'" Stuart continued. "It hits the business first, then the employee, then finally the consumer. It also plays havoc with our transportation after March first. People intentionally keep their inventory low until tax day, then our roads are clogged the next couple of days with trucks taking new product to the stores."

Stuart, like many other business owners in the county, believes the tax is unfair and targets only certain people in its collection. She claims that the tax discourages owners to keep a full inventory and in the long run tries to slow down business.

At the aforementioned meeting a group of over 20 people showed to support the repeal of the tax. Stuart, who was there alongside Jaffe and others, was "surprised that there were so many people representing different businesses who were all in favor of repealing the tax."

County Councilor Rita Rothrock is also surprised at the number of people who attended the meeting, though pleasantly.

"It's something I know would be good for business in the county," she said. "The people attending the meeting were all for it, and that shows what people feel.

"If people are for or against something, you really need to pay attention," Rothrock continued. "You have to vote along with what your constituents think."

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