According to several articles recently published by business, accounting and legal professionals, the Oregon State legislature passed the Gross Receipts Tax, which will adversely impact all businesses (primarily retailers). It was no surprise that the current Governor signed this into law, as this state cannot seem to control its runaway budget, and continually has its hand out to grab more money from businesses and property owners to feed the state’s spendthrift philosophy.
Since the focus on virtually all tax increases in recent Oregon history appears to be designed to try and plug the gaping hole in the State’s PERS budget (Oregon state’s government pension plan with a $27 Billion deficit), we can all expect more proposals to take more income from the private sector businesses that employ Oregonians. If this law goes into effect, the consequences will be businesses that either shut down or move out of state, while job losses and price increases ensue for many products and services provided by businesses that operate within the state.
This regressive tax will hit all businesses whose gross sales are $1 million and above. Although this sounds like a lot of money, there are many small business establishments such as independent grocers and restaurants that may generate over $1 million in total sales, but their net profit margins, after all expenses are deducted, can range from as little as 1% – 5%.
As an example of the impact to a small business owner, Matthew Kish of the Portland Business Journal noted that the basic calculation includes a $250 tax plus 0.57% on “gross receipts” (sales) of $1 million or more. Let’s say an independent store owner has gross sales of $2 million and their average net profit is 3% or $60,000; they will be allowed to deduct 35% of labor or cost of goods (whichever is greater). After deducting the 35% they would be levied this additional tax on $1.3 million, so their tax liability according to this new law would be another $7,660 out of their net budget, leaving the owner with $52,340. This is a reduction in their personal income of approximately 13%!
Of course this doesn’t include the other pressures faced by small business owners, such as rising costs of rent, food costs (for grocers and restaurants), mandatory minimum wage increases (for hospitality businesses, Oregon State doesn’t recognize gratuities (tips) as “real income” and in typical bizarre fashion will not allow tips to be included in minimum wage calculations), and credit card swipe fees and other bankcard processing fees.
The Robinhood Group provides a solution for the last category; credit card swipe fees. By using a special software platform that was developed after Visa and Mastercard were successfully sued for acting like a monopoly on the credit card market and a $6.2 billion settlement that went into effect starting in 2012, the final terms were settled in 2018. The Robinhood Group’s banking affiliates began offering Small Business Credit Card Processing with Cash Discount. Cash Discount Card Processing allows for the merchant to pass a small non-cash fee on to customers who opt to pay with a credit card instead of cash.
Using the same example above, that same independent store owner would save over $54,000 in annual card swipe and bank discount fees by switching to The Robinhood Group’s Cash Discount Merchant Card Processing solution. This alone would help the business owner recover not just the $7,660 lost to Oregon’s regressive tax hike, but INCREASE their net profit by approximately $30,000, giving this business owner a raise of about 50% annually; all without having to raise prices for their customers!
Since inception of this Cash Discount Credit Card Processing program (which is available in all 50 states), over 22,000 businesses have switched to ‘cash discounting’ when it comes to accepting payments from their customers; and hundreds more are switching every month, including national chains such as Buffalo Wild Wings (some locations) and Cici’s Pizza. These businesses have been saving over $4.25 billion annually by not paying the card issuing banks just to accept payment in the form of plastic.
The Robinhood Group takes its mission one step further by providing tools and resources that also help small businesses grow their customer base by implementing Social Media Marketing, Online Reputation Management, Search Engine Optimization, and even Business Lending. All of these resources are designed to provide maximum support and deliver a positive impact for its clients, with the objective of growing both the top line and bottom line.
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