by Brian Mahany
Mention young entrepreneurs and many folks will conjure up visions of the neighborhood kid mowing lawns or selling lemonade on a hot summer day. Today’s post is about two very young kids selling pumpkins in Lewiston, Idaho (population 30,000), selling them until the tax man showed up. A few days ago an employee from the Idaho State Tax Commission ordered a 4 year old boy and his 6 year old brother to shut down their pumpkin stand.
The boys parents were told that the stand could reopen if the family obtained all necessary licenses and permits and collected sales tax on the pumpkins.
Let’s see, health inspections, agricultural permits, weights and measures, business licenses, sales tax permits and perhaps transportation department approval for signs and parking. That cost could easily be in the thousands of dollars. A bit much for a six year old trying to save money for sports activities. Then again, even if they did get all the permits, Halloween would long be over and the labor department would probably arrest the parents for violations of child labor laws.
This type of heavy handedness gives tax officials and government a bad name.
When I ran Maine’s state tax department between 1995 and 1998, we frequently encountered Christmas tree sellers operating 3 or 4 weeks a year. Some were tiny mom and pop operations and some were huge commercial enterprises. Tax authorities have a job to do – and certainly no one likes to pay taxes – but a little discretion goes along way. Were the 4 and 6 year olds threats to Idaho’s fiscal stability? Obviously not.
It is unknown whether the boys complied with the order or are now fugitives. Actually, they are probably folk heros by now.
News of the incident spread rapidly. Even TV commentator Glenn Beck picked up on the story.
Obviously, the parents had some involvement in the business. The local newspaper, the Idaho Reporter, carried a picture of one of the boys trying to pick up a pumpkin twice his size.
Thankfully, incidents this outrageous are few and far between. Tax officials do often become heavy handed however. If you are facing the closure of your business, seek professional help. Call your accountant or tax lawyer. Many problems can be solved without expensive audits, enforcement actions or litigation.
Mahany & Ertl are Wisconsin’s tax lawyers. Our legal team can help with a variety of tax issues including tax compliance, audit representation, tax collection and criminal investigations.
Contact Brian Mahany at (414) 704.6731 or through the website, www.mahanyertl.com