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Views: Illinois government strikes again

Published: Tuesday, Feb. 18, 2014 9:10 p.m. CDT • Updated: Tuesday, Feb. 18, 2014 9:25 p.m. CDT

SPRINGFIELD – Susan Clause is no quitter.

For 16 years, she and her husband, Stephen Briggs, have owned and operated a teacher supply store, Ergadoo, in Springfield.

They love their business, and it’s making money, but they are shutting it down this week.

Why? They say the state of Illinois has made it too difficult to operate.

It’s a painful decision for the couple who founded the store 16 years ago.

They fought to keep the doors open when Susan was fighting leukemia and Stephen was battling prostate cancer – at the same time.

But now they are facing an obstacle they just don’t want to deal with: the Illinois Department of Revenue.

Here how Susan explained it:

“Five years ago, we received a sales tax audit from the state, and they said we were doing things just fine. And then we were audited again this year. And we were told we were doing things wrong. We can’t operate if we don’t know what the rules are.”

For 10 days last month, a state auditor camped out at their store – sitting at one of those tiny little children’s tables – reviewing three months of receipts. And that’s where the problem began.

Ergadoo is the sort of business that has many nonprofits as customers – schools, churches, nurseries.

Those types of organizations don’t have to pay sales taxes.

So, teachers, church secretaries and principals often come in bearing letters from the Illinois Department of Revenue declaring their organizations’ sales tax exemptions.

Susan and her husband dutifully record the transaction – along with their tax exemption number.

Sounds good, right?

Well, no. The Revenue Department says that’s not good enough.

Clause said the Revenue Department told her it’s her store’s responsibility to determine where the customer’s money comes from.

“How am I supposed to prove if someone comes in with a $20 bill and a tax-exempt letter whether that money is from a school’s petty cash fund or someplace else? I can’t. No one can,” Susan said.

The reason behind the rule is to keep people from borrowing a letter from a nonprofit and stocking up on stuff for their own personal use.

But like bureaucrats do, no common sense is being applied here.

“We operated under the assumption that we were doing things right – the last auditor told us we were. Now we are being told differently and having to pay back taxes. Sure, we could appeal this or go to court. But we don’t want to hire a lawyer – that would cost us more than they say we owe. So we are shutting down.”

Fortunately, Susan and Stephen have an alternative – they are expanding the children’s museum they operate next door, Ergadoozy, into the area the store is vacating.

Now, Springfield educators are more likely to buy online from some out-of-state firm, and Illinois will lose even more commerce.

It doesn’t make sense.

• Scott Reeder is a veteran statehouse reporter and the journalist in residence at the Illinois Policy Institute.

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