Penny tax dispute hurting small businesses

On Tuesday, Richland County is set to appear in court asking Judge Thomas G. Cooper to order the S.C. Department of Revenue to release penny tax revenue it is withholding from the county. The Revenue Department says it won’t release the money until the county brings its program into compliance with department standards; the county says the agency is overstepping its bounds.

In this he-said she-said battle, here is what I say: The county and state need to find a way to address their concerns without withholding revenue from companies that are performing taxpayer-approved work.

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Under our contracts, subcontractors are not paid until the prime contractor gets paid. That means if the Revenue Department doesn’t release revenue from the penny tax in July, our company will not get paid for the work we have already done. While larger companies may be able to sustain such a loss, we can’t. As my fellow small-business owners know, our coffers are not always as full as those of the big boys. We operate on a much tighter budget and a thinner profit margin.

In November, when my finance manager and I sat down to set the 2016 budget, we looked at our current and anticipated revenue and expenses. Revenue from penny tax projects was a key component. In fact, we hired a new engineer based on the contracts we had signed. Now, there is a chance that we may not collect the payment for the work that we’ve done and are scheduled to do.

For more than 40 years, I have been on the front lines as a voice for equity for minority business owners. As such, I am very familiar with the county’s poor track record of providing opportunities to minority businesses.

To address this, the county developed the small local business enterprise program, which became the vehicle to award more contracts to small and local businesses, many of which are minority-owned. Many of us saw the penny tax program as the first major opportunity to win substantive contracts with the county, thus growing our business and gaining capacity. That’s why I was such a strong advocate for the penny tax, spending my personal resources and my political capital to promote its passage. Now, if the Revenue Department’s efforts to withhold funds from the county are successful, my company will not be able to collect on the work that we’ve done, which is worse than not getting the work at all.

Oftentimes, small businesses operate on small budgets, much like the average household. So I ask county and Revenue officials and Judge Cooper how long they could sustain their households if they were not able to collect a paycheck for the work that they spent the past six months completing.

I understand that the county and the state both have concerns that they feel strongly about. I ask them to work it out as they see fit; just don’t withhold revenue in the process.

This would have a significant impact on businesses across the board. For small and minority-owned businesses, which often don’t get a fair piece of the pie, it could be devastating.

So, as the two entities go back and forth, I want to remind them that there are real people and real businesses on the end of this dispute.