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Tax increases on the horizon
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Governor Arnold Schwarzenegger
The State Board of Equalization has submitted a special notice, advising the Sales and Use tax will increase effective April 1, 2009. The interesting fact to notice is that Solano County will increase to 8.375%, San Francisco County will increase to 9.50%, Alameda County will increase to 9.75% and Santa Clara County will increase to 9.25%, with the City of Campbell adding an additional .25% to the standard 9.25%. Many of these differences are a direct result of special taxes that were passed during elections.
What will this mean to your business before and after April 1, 2009? This is one of those instances where you have to seize the moment. Now is the time to take advantage of any opportunity to sell in bulk, whenever possible. Although, a lot of attention will be placed on your “big ticket items,” the reality is that any product needs to be pushed out there. Putting all products in front of your target market, and educating them on how this tax will affect the cost of all goods sold in the future, is critical.
Businesses also need to review their existing contracts, and determine whether there is room for renegotiation of their rates. Contractors who are currently providing goods and services to the Department of Public Works were notified they would be responsible for the increase resulting from the added taxes, as contracts will not be re-negotiated. This is something contractors did not foresee, and could happen to any business where a contract is in place.
What businesses don’t want to do is raise too much attention to the affects of this tax increase, post April 1st. This will be tricky. Businesses must look at ways to be creative in their operations and sales strategies today, as well as create the potential for opportunities in the future. Now is the time to galvanize executive teams and strategically look at the operations and sales options, write out a plan of action, assign individuals to spearhead established projects, and roll them out. It would also be beneficial for businesses to seek out advertising professionals who might assist with creative ideas to generate immediate attention to products within the market, and increase opportunities to move products out the door within the next few weeks.
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