You Must Stop Doing Business in Tacoma Now!

“The subject line of the official hand delivered letter from the City of Tacoma reads, You must stop doing business in Tacoma now! And, after conducting business from their North Tacoma production office for 19 years, that is exactly what Puget Sound & Pictures has done.Tacoma’s award-winning video production team of Wendy and Ed Isenhart has put their building up for rent and is moving their business elsewhere. After all, they say, that is essentially what the City of Tacoma told them to do.We’re telling people we’re out of business in this town, said Wendy Isenhart. Under their logo on their door, are the words, Moving to Seattle.With $190.96 in late fees for City Business and Occupation Tax filings and City Business License renewals for three years, it isn’t necessarily the money that convinced the Isenharts to leave Tacoma. It was the attitude of City of Tacoma officials, the possible taint of politics, and even competition – with the City itself – that the Isenharts say was the final straw. They closed their doors, leaving behind clients like the Port of Tacoma, Tacoma Public Schools, and a variety of corporations and organizations.The Isenharts said they always paid for their business licenses, and B&O taxes, but are a small company without an accountant. They don’t dispute whether they were late, but say they pay their bills once a month, and if a bill comes after that time, then it waits until the next month’s bill paying session.Late fees assessed against the company include 15 percent B&O penalties for being 41-70 days past due, 12 percent annual interest on the tax penalty, a 50 percent penalty on a late business license renewal, and others – a total of six penalties in three years.We’re a mom and pop business, Wendy Isenhart said. We don’t have a bookkeeping service.Though the City said it mailed them, the Isenharts said they don’t remember receiving the six individual penalty notices. They did get a final notice dated March 16, 2000, which lists, but does not detail, the six fines. The letter gave the company two weeks to file a written appeal with the City Clerk.It was then, Wendy Isenhart said, she called the City, believing the fines to be a mistake and wanting details on the billing. She left a message, then received a return call and faxes of the penalties from the Tax & License Division.On April 20, Duston Jensen, manager of the division, hand delivered the letter notifying the Isenharts to stop doing business and return their Certificate of Registration or face fines of up to $1,000 a day, and a possible sentence of 90 days in jail.We mailed it back a week ago Monday, Ed Isenhart said. That’s it, we quit.Thinking that no one would close down businesses for less than $200 in late fees, the Isenharts began to consider whether the action was politically motivated.The couple, active sailors and boatowners, are outspoken proponents for keeping Totem Marina in public ownership and serving local boaters. Believing the sale of City-owned property along the Thea Foss Waterway to be possibly against the City Charter, the Isenharts asked the Washington State Auditor to investigate.The investigation’s results, reported to the Isenharts on April 13, found in the City’s favor, but they found themselves wondering if there was a connection. Jensen, along with Hank Emond, one of three compliance officers for the City, insists there is no political connection.Tax law is sometimes drafted for political reasons, Jensen said. But enforcement and compliance of that law is based on equal treatment. I don’t operate this based on politics. I can’t. This is what the code says. I’ve got to enforce it.We have a set of rules, they’re for everybody, Emond said. We can’t deviate from them. We don’t have prerogatives to change things.The Isenharts also say they believe some of their competitors operate without a business license or paying B&O taxes, something they say puts their competition at an unfair advantage. Out of 28 video production companies listed in a local directory, the Isenharts said Jensen only found five with Tacoma business licenses.I told him (Jensen) I want all my money back, said Ed Isenhart. These (licensing and taxes) are supposed to be fair and equitable. If 90 percent of our competitors don’t have licenses or pay taxes, then the City is penalizing people who pay. If it’s not going to be fair and equitable, then refund all my money. I’ve been paying since 1981.For the most part, the ones (video production firms) in Tacoma are registered, Jensen said. But just because they’re advertising in the Tacoma phone book, they don’t have to have a license. Once they engage in business activity in Tacoma, then they have to have a license.Jensen said the division tries to ensure people doing business in Tacoma are licensed and registered to pay B&O tax. They monitor the City’s accounts payable to ensure vendors to the City are in compliance, and do accept complaints from businesses about competitors.The Isenharts noted that a list of video production firms the City uses to refer interested parties to video production firms has many without a Tacoma business license. In fact, they said, on the City-owned TV Tacoma Vendor List prior to 1997, used for government contracting for video services, no one had a business license. Puget Sound & Pictures was omitted, despite having a business license. The omission may have cost the company a sizable contract with Tacoma Public Utilities, the Isenharts said.A more current vendor list also names over three times more production companies outside of the city than in Tacoma. This raises the issue of why the City of Tacoma is still referring business outside of the city, the Isenharts said.Then, the Isenharts said, there is the subject of the City’s own television production company competing with private firms like theirs.TV Tacoma is doing commercial production, said Wendy Isenhart. That puts us in a very unusual situation. They have the largest municipal TV production department in the country.We can’t compete with them, said Ed Isenhart. All their equipment and needs are provided. If there’s a cable rate increase, there’s new equipment for TV Tacoma.Nancy Johnson, manager of TV Tacoma says the City’s station doesn’t compete, but has produced training programs for the Tacoma Police Department, and a feature story about the Port of Tacoma and its role in the city’s economic development.Johnson said she does not feel that TV Tacoma competes with local video firms, and by broadcasting videos PS&P has made for clients like the Port and the Tacoma School District, the network actually provides a service – an outlet to show the videos to a wider audience.The Isenharts said, in return, TV Tacoma and Rainier Cablevision, the Pierce County government channel, are getting quality programming for free – programming similar to that KSTW and KCPQ used to compensate the company for – before Tacoma lost its commercial television stations to Seattle.I believe the answer to the competition issue is self-evident, Wendy Isenhart said. The government cable stations and production departments are growing and the commercial television stations, and production companies like us, are going and gone.That option left town, Isenhart continued. Tacoma is now a cable TV, government TV town that doesn’t need us. They can do it all themselves.But small business bookkeeping requirements for federal, state and city taxes and licenses, became the straw that broke the proverbial camel’s back.Fines of up to 50 percent, and interest, make for resentment from hardworking small business people who don’t have the time or resources to dedicate to bookkeeping demands, the Isenharts said. We have to draw the line somewhere, Jensen replied.Emond said he commiserates with the Isenharts about the difficulties of small business bookkeeping, and hates to see them close their business.I’ve been here four-and-a-half years and I can’t think of one (business) that we closed that wasn’t a police action, Emond said. It’s one of the sorriest things wh
en one leaves. Even if they called
me today, I’d help them.Emond noted he is working through a stack of 500 or so late fee letters, and hasn’t been out in the field to enforce compliance for over a month.Meanwhile, the Isenharts still worry the City could retaliate against them.We weren’t going to tell anyone, we were just going to leave, Wendy Isenhart said. They can hurt us. We’re just a little business.They can walk in here tomorrow, say ‘Here’s the payments and penalties,’ and I’d hand them their registration, Jensen said. I’d say, ‘If I can help you in the future, please let me know, and if you have a problem, talk with me before it becomes a big problem.’All this, ‘call me, we’ll work it out.’ comes down to is, ‘pay the money or go to jail,’ Wendy Isenhart said. Okay. We’re paying the money as we don’t want to leave town owing anybody anything.As the Isenharts continue their preparations to leave Tacoma, some of the work they are finishing is on their documentary video of a sailing circumnavigation of Vancouver Island. Land of Mist, Around Vancouver’s Island, was filmed from their boat – proudly displaying Tacoma on its transom as its home port.It may be ironic the video is nearing completion – just as its makers prepare to set sail for another destination.”