March 26, 2012
Have you heard the expression, “I’m from the government, and I’m here to help”? Usually, this is meant sarcastically. But I believe we in state government should challenge ourselves to take that expression literally, and begin a culture change within Vermont’s regulatory agencies.
Over the years I've heard from many Vermonters who have felt victimized by rule changes, inconsistencies, and a perceived “gotcha” attitude from agencies throughout state government.
Recently, the Tax Department has received attention for their sudden policy change, announced in a “technical bulletin”, whereby they started charging software developers back sales taxes and associated penalties for software that is not physically purchased, but accessed virtually through a network.
The question of whether Vermont should be charging sales taxes on “cloud computing” is now the subject of vigorous debate in the Legislature. But I believe a larger, and more troubling, issue that underlies this discussion is the suddenness of the change and the culture of fear that it exemplifies in the relationship between business and state government.
Here’s another example. A retail store owner had always assumed that work gloves were clothing, and therefore exempt from sales tax, as is all clothing in Vermont. The Tax Department, however, considered them “protective gear,” and after a recent audit, the store was assessed back sales taxes. To the Department’s credit, the parties came to a settlement, but not without debate.
These and other Vermonters I’ve heard from are good citizens who would be happy to protect the environment, run a safe workplace, and “pay their fair share,” had they known exactly what that meant. Left on their own to interpret the rules, they did the best they could, and many were later penalized. I think these stories suggest a need for state government to advise, not just to audit; to be a partner, not just a punisher. In other words, to be there to help, which in turn may collect tax revenue sooner than waiting for an "after-the-fact" audit.
For example, the Department of Revenue in the State of Washington offers a tax consultation service. Business owners can request a meeting with a Department representative, where they can ask questions and receive advice on everything from tax liabilities to record-keeping. If any irregularities are found, the business owner is not subjected to penalties at that time.
This same approach was successfully implemented in the Vermont Occupational Safety and Health Administration several years ago, when VOSHA added a separate education team alongside their compliance division. Like the Washington State tax consultants, VOSHA educators will, upon request of the contractor, visit construction sites and let contractors know if they spot unsafe working conditions. The company is then given a period of time to fix any issues without penalty.
This positive, pro-active outreach achieves the desired result -- Vermont employees are made safer – only with a “carrot” instead of a “stick.” I believe other regulatory agencies could achieve their goals – more consistency, fairness and transparency – by following a similar path.
I offered these thoughts at a recent legislative breakfast sponsored by the Lake Champlain Regional Chamber of Commerce, and I was glad to hear that Senate President Pro Tem John Campbell, who joined me on the panel, agreed. Perhaps by working together with the Administration, we can help change the regulatory culture in Vermont. I look forward to those conversations and to being a part of making state government more helpful to the citizens we’re elected to serve.
Source: Office of the Lieutenant Governor
Last Updated at: March 26, 2012 12:15:15