12 ms·

Louis Rossmann explains why he left New York

72 points by danuker 4y ago

perfecthjrjth 4y ago
I think businesses should move away from NY, CA and other states to states where it is easy to do business.
- blamazon 4y ago
  So, you think businesses should move away from the largest single-point concentrations of customers and workers? Something like 20% of all the humans in USA are represented by those two little acronyms NY and CA. 'easy to do business' isn't just about regulations. It's often about fishing where fish are. Tangentially related to differences in regulation between states, but interestingly Oklahoma has a nearly ironclad ban on noncompete agreements for workers. Has some fascinating effects for attracting skilled labor there. I know welders, mechanics, electricians, etc based in OK that are at the top of their game nationally and earn mind blowing salaries hopping from contract to contract, like sports players. Usually unionized as well, so reasonable work-life balance to boot.
  - mathgladiator 4y ago
    > So, you think businesses should move away from the largest single-point concentrations of customers and workers? Something like 20% of all the humans in USA are represented by those two little acronyms NY and CA. Yes. At a certain point, it's just not worth it. Atlas Shrugged makes the case that competent people are not slaves and they can just stop.
    - blamazon 4y ago
      The GDP and other economic statistics of NY and CA (also about 20% of whole country) suggests to me we have not reached that point yet. They are operating on the world stage economically which suggests it continues to make sense to do business there. But, if all the people objecting to the regulations that make life better in those states want to go away, all the better for the remainers in my eyes I think. We'll see which US megaregions are still economically and culturally dominant in 50 years, and I suspect it's going to still largely be CA and NY, complaints of libertarians aside. Granted, I think the northeast megalopolis will eventually extend downwards to Atlanta and even Florida via high speed passenger rail eventually and knit together the whole east coast as a megabloc, which raises interesting questions about how that entity will federate given the differing cultural ideas at present.
  - larossmann 4y ago
    > So, you think businesses should move away from the largest single-point concentrations of customers and workers? Something like 20% of all the humans in USA are represented by those two little acronyms NY and CA. You are correct in that you need to fish where fish are. Conversely, this sounds too close to staying with the abusive partner because they're hot. At some point, the abusive partner needs that prompt to change their behavior, and that does mean leaving them, even if they are hot.
- Cipater 4y ago
  Companies are headquartered in states like NY and California for a reason.
- theshrike79 4y ago
  Just move them to Delaware, no need to worry about anything because you can hide your ownership in a structure so complex they'll never figure out who to tax!
- dev-3892 4y ago
  i can't hear 'easy to do business' and not also hear 'i wish i could just sell poison apples to people without all this government getting in my way'. regulation is what makes a market trustworthy. a trustworthy market is an efficient market.
  - protastus 4y ago
    Tax code reform (simplification) is completely orthogonal to public safety.
    - blamazon 4y ago
      Best not to simplify NY tax code too much, lest ye remove this little ditty: > The Excelsior Jobs Tax Credit: A credit of 6.85 percent of wages per new job. It's 7.5 percent for 'green' companies.
user3939382 4y ago
Maybe I can save someone a lot of time. There is no middle class in NYC. If you’re not making 300-400k and you have kids you’re gonna have a bad time. You’ll pay insane rents and you’ll still live somewhere where it’s not safe to walk around at night. The people who have always lived this way are like victims in an abusive relationship and think it’s normal. Even the most expensive neighborhoods are infested with rats, mice, and cockroaches. There are regularly mountains of stinking garbage along sidewalks. The roads are falling apart. Restaurants are extremely expensive, a small horrible quality chicken pot pie at a _diner_ in my old neighborhood was $25. A small cup of horrible coffee was $4.50. If you want a place to live you better make 45x the rent, and have been making it for 2 years+, with perfect credit. Oh no? That’s fine, you just need someone with 100x rent income to put their social on your rent bill. The subways are an inferno in the summer and freezing in the winter. Even the major ones like 34th street smell like you’re descending into a moldy dungeon. You can see the mold slime (and rats) all over the rail channel. Psychotic mentally ill people that, for example, have full conversations with people that aren’t there, are not uncommon. Expensive neighborhoods have people living in pup tents on the sidewalk. If you’re single and young and daddy is paying for everything it might be fine. If you’re very wealthy it’s fine. Anyone else do yourself a favor and stay away.
- dinobones 4y ago
  The exact same thing goes for the SFBA. When I was a new grad on a FAANG salary, and I had to move out there, I couldn't believe the low quality of the places that I could afford to rent, and the way other people working in tech lived. The QOL of a $200k/year tech worker, and the nasty little apartment they were able to afford (or share with another tech worker), was about the same QOL as that of someone making $50k/year back home. I still can't believe that "highly paid" tech workers are okay with living in those conditions. As someone from a middle class family who lived in a very big and comfy McMansion with air conditioning and a washer and dryer, it felt like a massive downgrade in my lifestyle.
  - jmathai 4y ago
    The cycle I've seen for people 30yo+ in the SFBA is this... 1. Take a job and move, start by renting 2. At 5-10 years, start thinking about buying 3. By year 10, either determine you can purchase a home or not If you can or cannot buy a home will determine your general quality of life. Partly due to owning a home but also because it signals how much wiggle room you have financially. 4. If you can't afford to buy a house then you end up frustrated because there's a life you see others living it and you can't. You end up moving back bitter. 5. If you can afford to buy a house then it's a sign that you could likely have a good life. I warn folks coming to SFBA that if they don't see a path to a $400k yearly household income that they should plan to stay for <5 years before deciding to move.
yashg 4y ago
Can someone give a TLDW version?
psychphysic 4y ago
What makes him think Texas won't be similar? I mean from what I know of Texas it won't, but from what I know of tax systems it will. Honestly, everywhere I've done business I've had similar issues. And the general advice is you do your best to work honestly and hope if a mistake is identified you don't have too big a punitive component.
danuker 4y ago
TL; DW: the state tax authority abused him.
RosanaAnaDana 4y ago
It's his own fault for not getting council at the appropriate time.
- cjbgkagh 4y ago
  I don’t blame people for being too trusting and not entering into conflict with a state with bottomless pockets and a strong desire to win at any cost to avoid setting precedents. I was hounded by California tax collectors over a mistake they made, it was clear they weren’t going to listen to reason on how they were obviously wrong given their own documentation and a lawsuit was going to be my only recourse. I opted to just give them the money, it was far less than the cost of a lawsuit. I consider it a cheap lesson in dealing with California tax collectors something I never want to risk having to do again.
- DerekL 4y ago
  * counsel
ThrowawayTestr 4y ago
Oh damn he finally did it.
imhoguy 4y ago
Sorry to hear the story. Reminds me EU VAT audit mess. Sometimes I dream we could make some virtual businesses completely in cryptospace to just avoid real world kafkesque bureaucracy we have now. And I am not about avoiding paying taxes, I am absolutely fine to pay % of what I get onto my personal account.
- hef19898 4y ago
  Thanks for confirming that cryoto is mainly about tax evasion. By the way, EU VAT is pretty much straight forward. No idea why some people cannot be bothered with the simplest of basic requirements to conduct business in a certain jurisdiction.
  - imhoguy 4y ago
    Are you kidding? Just telco & SaaS: https://ec.europa.eu/taxation_customs/business/vat/telecommunications-broadcasting-electronic-services/vat-rates_en https://ec.europa.eu/taxation_customs/business/vat/telecommu... An if you reach certain scale and do mistakes you risk 25 years of prison in some countries.
    - hef19898 4y ago
      So, for some reason corporations cannot be bothered with proper tax consultation and services? I know compliance sucks, all that difficult to navigate rules and such, and distract from innovative disruption, but in order to avoid "25 years of prison in certain countries" those rules all well worth respecting. Most SMEs do without making a fuzz about it on social media.
      - milesvp 4y ago
        >>EU VAT is pretty much straight forward. You are directly contradicting what the parent is commenting on. I honestly can’t tell if your current comment is trying to be sarcastic, but you are clearly not putting forth consistent arguments. I personally sincerely doubt EU vat is straightforward. Accounting itself is not straight forward and you can’t do any taxes without accounting. I’m a big fan of corporations paying for failure in compliance, but your tone could be slightly more generous. 25 years could be a big deal if one country requires fifo cost accounting and another requires lifo cost accounting. Do you comply with the one that puts you in jail? do you keep 2 books? do you keep seperate books for each country? Then, which do you actually use to make business decisions? These are kind of hard questions to answer, and can require considerable resources.
jjeaff 4y ago
Don't even have to watch and I can guess the why. He built up a business using the dense, relatively wealthy New York ecosystem, despite the difficulty created by heavy regulation. Now, his business has either grown large enough online with non-local customers that he can leave New York and still do well ... Or his social media is enough of a business unto itself to leave. Which I think is fine. But it's also important to recognize that many of these people leaving urban areas like this would never have been able to build a business had they not started their business where they did.
- PaulsWallet 4y ago
  This is wrong and you should just watch the video before getting on your soapbox. Or at least click on it and see the title which almost certainly tells you why.
- MrStonedOne 4y ago
  Heavy regulation isn't the issue, its heavy bureaucracy as a stick to beat people with. His ""violations"" were all mistakes on the cities part or auditors trying to pigeonhole things into regulations they don't apply to. He followed the regulations, and that wasn't even good enough. You say he "used the dense, relatively wealthy New York ecosystem," to launch a business, but from their prospective i bet they feel they started a company in their hometown and then their hometown spat in their face in an attempt to get more money.
MichaelZuo 4y ago
It seems odd for NY State's tax office to use relatively tough methods to check tax compliance. Is that commonly experienced by SMEs there?
- PaulsWallet 4y ago
  At one point in the video, Rossman does imply that he is getting special attention because tech lobbyists (i.e. Apple) are trying to attack him because he lobbies against Apple when it comes to Right to Repair and has done so for years. Not only through criticism on YouTube but in government hearings. Specifically hearings about Right to Repair.
  - larossmann 4y ago
    > At one point in the video, Rossman does imply that he is getting special attention because tech lobbyists (i.e. Apple) are trying to attack him because he lobbies against Apple when it comes to Right to Repair and has done so for years. Not only through criticism on YouTube but in government hearings. Specifically hearings about Right to Repair. That's not my claim. I am not saying audits result from that. I am saying, that the fact that my business model was disruptive in nature(show people how to do repairs that our industry has tried to keep secret for a long time) combined with the legislative efforts means it would be stupid for me to do something like cheat my taxes. It's incredibly low hanging fruit if you actually have enemies. A competitor's business 10 years ago asked if I would close for $80,000, and implied he'd be reporting me to state collections agencies if I didn't take the offer. I laughed, and he said this was being cocky. "I pay people on the books, unlike you. and then I rattled off the names of 3 people he was paying off the books.. and he shut up.
  - MichaelZuo 4y ago
    That seems like a big claim... he doesn't seem to offer any proof for it.
    - PaulsWallet 4y ago
      He doesn't. It is pretty much a throwaway comment that he quickly moves passed.
protastus 4y ago
He mentions a CPA at the end but I didn't catch any mention of an attorney. I wonder why. The state bureaucracy doesn't care about you. The tax code is enormous and only gets bigger. The bureaucracy's game is to claim you screwed up with minimal transparency. Nobody will volunteer to do a deep dive on your case, nobody has an incentive to help you, and nobody is accountable for their mistakes or lack of effort. It's very difficult to play with these rules, and an attorney can help change the game.
paleotrope 4y ago
If we can avoid saying I'm victim blaming, he clearly made mistakes. If someone is giving you money (front of the line/rush service) in most tax jurisdictions, you are going to owe a tax on that. The website errors of not paying local sales tax well that's just ...dude.... you were seriously playing with fire on that one. Also, if you have a target on your back you have to make sure your stuff is spotless. It's not fair but it's just the way it is.
- deleted 4y ago
  [deleted]
- tpmoney 4y ago
  NY[1] (and I think many states) often exempt services from sales tax. A "rush service" fee would be something I would think falls under a professional service exempt from sales tax. Apple's retail ProCare service used to give you "front of the line" on repairs, and to the best of my knowledge was not a taxed transaction. This would to me be the same sort of thing. [1]: https://www.tax.ny.gov/bus/st/transactions_not_subject_to_sales_tax.htm https://www.tax.ny.gov/bus/st/transactions_not_subject_to_sa...
- larossmann 4y ago
  > If we can avoid saying I'm victim blaming, he clearly made mistakes. If someone is giving you money (front of the line/rush service) in most tax jurisdictions, you are going to owe a tax on that. The website errors of not paying local sales tax well that's just ...dude.... you were seriously playing with fire on that one. My problem is not owing on the areas where I made a mistake, which were 0.1% of my transactions. By all means, spend a year and two people's time around the clock going through my books to uncover less than $7k, the state is welcome to spend their time the way they see fit, regardless of fiscal viability. My problem was with the starting assumption that my error rate was closer to 50%, before they even read any of my submissions, and maintaining this for almost a year and digging into it. That's a heart attack. Every step of the process feels like you are trying to convince a toddler that PPBUS_G3H is 8.5v when the SMC works and 8.15v when the SMC doesn't, and if you can't get the toddler to understand it you lose your life savings. A 0.1% error rate is a pretty good error rate. Would I prefer 0%... sure... I am human... I spent years trying to grow a business from nothing. I didn't get a bank loan for this or line of credit, I was rubbing two sticks together for years, working out of the park, and taking the time to show everyone else how to do what I do once I learned how to do it at night during the little spare time I had. To do that and be at 0.1% for an error rate after a year of professionals who are financially motivated to find everything they can, I'm actually kinda proud of that.
jokoon 4y ago
That's pretty sad. At the same time, New York is not a simple city. So I can't imagine how things are over there, there is a lot of pressure from a very dense and expensive city. Tax collection is the pinnacle of a well functioning of society. You never really know how those tax agencies make those decisions, and it's not impossible there are politics at play. To be really honest I'm quite happy to live in the EU. We have other kinds of problems, but it seems peaceful, but American problems scare me.
theossuary 4y ago
A lot of people are making this about how unfair New York is, as if the issue is New York (or other liberal cities). Its not. The issue is our government has been hollowed out by big business interests and their political supporters; it's gotten to the point where there's no recourse for individuals. We need to write laws that have actual protections for individuals, and actual penalties. If a law guarantees a right, but has no recourse if that right is taken, well then the law doesn't actually guarantee anything at all. Chomsky has an interesting take that seems relevant too: > And the other leading propaganda theme — and I don’t mean by that, you know, like, just what you hear in the newspapers- read in the newspapers and so on, like the entertainment industry and television and everything else — is anti-politics. Meaning, setting up a picture — it’s called anti-politics — the picture — but a very specific kind of anti-politics — you have to establish the image, you know, get into people’s heads, that the Government is the enemy- the Federal Government. State Governments are okay, because they can be sort of controlled by business anyway, so it doesn’t matter. But the Federal Government is sometimes a little too big to be pushed around, so it’s the enemy. And it cannot be, nobody can dream of the possibility, that the Government is of, by, and for the people. That’s impossible. It’s an enemy to be hated and feared. https://chomsky.info/19960413/ https://chomsky.info/19960413/
- Hydraulix989 4y ago
  I remember in a follow-up video after Louis moved to Texas mentioning how surprised he was when he found out he didn't need a license to run a repair business in their state.
  - _8j50 4y ago
    Yeah, texas likes businesses just fine, consumers not so much.
- subradios 4y ago
  You can say it's not about liberal cities or progressivism but about "big business" hollowing out the city, but when all of the cities in question are 60 to 80% democrats favored and only ever vote Democrat, as well as the large multinationals that headquarter there making explicit devotionals to progressive causes ("ESG" investing) - you do not escape entirely the idea that these may be related.
susssin 4y ago
New York city is like a really antiquated legacy codebase with tons of redundant checks that were added with good intentions and impossible to remove because you don't know what's truly holding the system together. It's far too complex for an individual to see the big picture well enough to slash the right things, and there's certainly an expectation that lawmakers to continue adding complexity in the name of simplicity but that obviously fails because they're overspecialized to the point where they are so far removed from the problem and without any kind of skin in the game they have no incentive to get their hands dirty and understand the plight of the regulated. Sometimes I wonder if the best course of action is to rewrite, but as with a codebase that's usually a mistake.
- jaybrendansmith 4y ago
  This is the challenge with all complex systems, from codebases to regulations. You really cannot start from scratch. My software approach is to tackle one component at a time (UI, Database, Messaging, etc.) but you must do it by fiat. Not sure how that is done in politics.
- bettyx1138 4y ago
  everyone should upvote this comment.
deleted 4y ago
[deleted]
canucker2016 4y ago
He's getting audited again - his CPA said that Rossmann is the first client who's gotten audited just after the previous audit finished. see https://www.youtube.com/watch?v=YvHt1Q3k-44 https://www.youtube.com/watch?v=YvHt1Q3k-44
- canucker2016 4y ago
  His payment for the amount due on the first audit was postmarked by the due date but arrived after the due date since he sent the payment via registered mail. Now NY State is going after him for missed payment plus interest. see https://www.youtube.com/watch?v=OXvuOD1D0gM https://www.youtube.com/watch?v=OXvuOD1D0gM
  - canucker2016 4y ago
    He also mentions in the video that he was overpaying his taxes because his accounting software wasn't backing out refunded purchases. This was a low four figure amount but he decided he didn't want to file an amended tax return to recoup the money (I assume because his CPA would do the work and the CPA's costs would eat into the money returned).
mlazos 4y ago
I watched about half of the video. Tbh his excuses about not properly counting sales tax to me just sound weird. if you have a business you need to hire someone who has expertise in this area if you grow to the size where it matters. I also find how he only shares his error rate and not the absolute numbers a little sus. I highly doubt the government would be auditing him if there wasn’t a lot missing. Meanwhile the rest of hn is ready to jump on the “I hate the government, it’s so dumb” bandwagon when it’s actually really hard to create a system that works as well as it does. I think it should be simpler and clearer for everyone but it’s a hard problem.
- ruste 4y ago
  He has! One of the things he mentions in this and other videos is that not even the CPAs he hired can answer if something is legal. He's also got recordings of him calling the city repeatedly about a fine and nobody can tell him how to avoid it, when it applies, or whether what he's doing is even legal.
  - Spooky23 4y ago
    Sales tax is a state tax, so calling “the city” is like calling your US Senator about potholes. Guys like this are usually full of it; the people he is railing about conveniently can’t respond.
- canucker2016 4y ago
  In the video at ~3:30, he mentions that the NY state govt says he owes ~$45.7K for one quarter - he says the amount owing would total high six figures, maybe low seven figures if that amount owing would be extrapolated from one quarter to the whole audit period in question (as he says in the video - more money than he is worth). In a later video ( https://www.youtube.com/watch?v=OXvuOD1D0gM https://www.youtube.com/watch?v=OXvuOD1D0gM ) where he pays the amount owing, he states that he has to send ~$6700 to the govt. So over one year of state govt auditing reveals ~$6700 that the state govt didn't get. But he's also mentioned in the video where he's getting audited again ( https://www.youtube.com/watch?v=YvHt1Q3k-44 https://www.youtube.com/watch?v=YvHt1Q3k-44 ) that he, via the first audit, has discovered he actually overpaid his taxes. He may try to claw back that money in the second audit.

72 points by danuker 4y ago

perfecthjrjth 4y ago

I think businesses should move away from NY, CA and other states to states where it is easy to do business.

blamazon 4y ago
So, you think businesses should move away from the largest single-point concentrations of customers and workers? Something like 20% of all the humans in USA are represented by those two little acronyms NY and CA. 'easy to do business' isn't just about regulations. It's often about fishing where fish are. Tangentially related to differences in regulation between states, but interestingly Oklahoma has a nearly ironclad ban on noncompete agreements for workers. Has some fascinating effects for attracting skilled labor there. I know welders, mechanics, electricians, etc based in OK that are at the top of their game nationally and earn mind blowing salaries hopping from contract to contract, like sports players. Usually unionized as well, so reasonable work-life balance to boot.
- mathgladiator 4y ago
  > So, you think businesses should move away from the largest single-point concentrations of customers and workers? Something like 20% of all the humans in USA are represented by those two little acronyms NY and CA. Yes. At a certain point, it's just not worth it. Atlas Shrugged makes the case that competent people are not slaves and they can just stop.
  - blamazon 4y ago
    The GDP and other economic statistics of NY and CA (also about 20% of whole country) suggests to me we have not reached that point yet. They are operating on the world stage economically which suggests it continues to make sense to do business there. But, if all the people objecting to the regulations that make life better in those states want to go away, all the better for the remainers in my eyes I think. We'll see which US megaregions are still economically and culturally dominant in 50 years, and I suspect it's going to still largely be CA and NY, complaints of libertarians aside. Granted, I think the northeast megalopolis will eventually extend downwards to Atlanta and even Florida via high speed passenger rail eventually and knit together the whole east coast as a megabloc, which raises interesting questions about how that entity will federate given the differing cultural ideas at present.
- larossmann 4y ago
  > So, you think businesses should move away from the largest single-point concentrations of customers and workers? Something like 20% of all the humans in USA are represented by those two little acronyms NY and CA. You are correct in that you need to fish where fish are. Conversely, this sounds too close to staying with the abusive partner because they're hot. At some point, the abusive partner needs that prompt to change their behavior, and that does mean leaving them, even if they are hot.
Cipater 4y ago
Companies are headquartered in states like NY and California for a reason.
theshrike79 4y ago
Just move them to Delaware, no need to worry about anything because you can hide your ownership in a structure so complex they'll never figure out who to tax!
dev-3892 4y ago
i can't hear 'easy to do business' and not also hear 'i wish i could just sell poison apples to people without all this government getting in my way'. regulation is what makes a market trustworthy. a trustworthy market is an efficient market.
- protastus 4y ago
  Tax code reform (simplification) is completely orthogonal to public safety.
  - blamazon 4y ago
    Best not to simplify NY tax code too much, lest ye remove this little ditty: > The Excelsior Jobs Tax Credit: A credit of 6.85 percent of wages per new job. It's 7.5 percent for 'green' companies.

user3939382 4y ago

Maybe I can save someone a lot of time. There is no middle class in NYC. If you’re not making 300-400k and you have kids you’re gonna have a bad time. You’ll pay insane rents and you’ll still live somewhere where it’s not safe to walk around at night. The people who have always lived this way are like victims in an abusive relationship and think it’s normal. Even the most expensive neighborhoods are infested with rats, mice, and cockroaches. There are regularly mountains of stinking garbage along sidewalks. The roads are falling apart. Restaurants are extremely expensive, a small horrible quality chicken pot pie at a _diner_ in my old neighborhood was $25. A small cup of horrible coffee was $4.50. If you want a place to live you better make 45x the rent, and have been making it for 2 years+, with perfect credit. Oh no? That’s fine, you just need someone with 100x rent income to put their social on your rent bill. The subways are an inferno in the summer and freezing in the winter. Even the major ones like 34th street smell like you’re descending into a moldy dungeon. You can see the mold slime (and rats) all over the rail channel. Psychotic mentally ill people that, for example, have full conversations with people that aren’t there, are not uncommon. Expensive neighborhoods have people living in pup tents on the sidewalk. If you’re single and young and daddy is paying for everything it might be fine. If you’re very wealthy it’s fine. Anyone else do yourself a favor and stay away.

dinobones 4y ago
The exact same thing goes for the SFBA. When I was a new grad on a FAANG salary, and I had to move out there, I couldn't believe the low quality of the places that I could afford to rent, and the way other people working in tech lived. The QOL of a $200k/year tech worker, and the nasty little apartment they were able to afford (or share with another tech worker), was about the same QOL as that of someone making $50k/year back home. I still can't believe that "highly paid" tech workers are okay with living in those conditions. As someone from a middle class family who lived in a very big and comfy McMansion with air conditioning and a washer and dryer, it felt like a massive downgrade in my lifestyle.
- jmathai 4y ago
  The cycle I've seen for people 30yo+ in the SFBA is this... 1. Take a job and move, start by renting 2. At 5-10 years, start thinking about buying 3. By year 10, either determine you can purchase a home or not If you can or cannot buy a home will determine your general quality of life. Partly due to owning a home but also because it signals how much wiggle room you have financially. 4. If you can't afford to buy a house then you end up frustrated because there's a life you see others living it and you can't. You end up moving back bitter. 5. If you can afford to buy a house then it's a sign that you could likely have a good life. I warn folks coming to SFBA that if they don't see a path to a $400k yearly household income that they should plan to stay for <5 years before deciding to move.

yashg 4y ago

Can someone give a TLDW version?

psychphysic 4y ago

What makes him think Texas won't be similar? I mean from what I know of Texas it won't, but from what I know of tax systems it will. Honestly, everywhere I've done business I've had similar issues. And the general advice is you do your best to work honestly and hope if a mistake is identified you don't have too big a punitive component.

danuker 4y ago

TL; DW: the state tax authority abused him.

RosanaAnaDana 4y ago

It's his own fault for not getting council at the appropriate time.

cjbgkagh 4y ago
I don’t blame people for being too trusting and not entering into conflict with a state with bottomless pockets and a strong desire to win at any cost to avoid setting precedents. I was hounded by California tax collectors over a mistake they made, it was clear they weren’t going to listen to reason on how they were obviously wrong given their own documentation and a lawsuit was going to be my only recourse. I opted to just give them the money, it was far less than the cost of a lawsuit. I consider it a cheap lesson in dealing with California tax collectors something I never want to risk having to do again.
DerekL 4y ago
* counsel

ThrowawayTestr 4y ago

Oh damn he finally did it.

imhoguy 4y ago

Sorry to hear the story. Reminds me EU VAT audit mess. Sometimes I dream we could make some virtual businesses completely in cryptospace to just avoid real world kafkesque bureaucracy we have now. And I am not about avoiding paying taxes, I am absolutely fine to pay % of what I get onto my personal account.

hef19898 4y ago
Thanks for confirming that cryoto is mainly about tax evasion. By the way, EU VAT is pretty much straight forward. No idea why some people cannot be bothered with the simplest of basic requirements to conduct business in a certain jurisdiction.
- imhoguy 4y ago
  Are you kidding? Just telco & SaaS: https://ec.europa.eu/taxation_customs/business/vat/telecommunications-broadcasting-electronic-services/vat-rates_en https://ec.europa.eu/taxation_customs/business/vat/telecommu... An if you reach certain scale and do mistakes you risk 25 years of prison in some countries.
  - hef19898 4y ago
    So, for some reason corporations cannot be bothered with proper tax consultation and services? I know compliance sucks, all that difficult to navigate rules and such, and distract from innovative disruption, but in order to avoid "25 years of prison in certain countries" those rules all well worth respecting. Most SMEs do without making a fuzz about it on social media.
    - milesvp 4y ago
      >>EU VAT is pretty much straight forward. You are directly contradicting what the parent is commenting on. I honestly can’t tell if your current comment is trying to be sarcastic, but you are clearly not putting forth consistent arguments. I personally sincerely doubt EU vat is straightforward. Accounting itself is not straight forward and you can’t do any taxes without accounting. I’m a big fan of corporations paying for failure in compliance, but your tone could be slightly more generous. 25 years could be a big deal if one country requires fifo cost accounting and another requires lifo cost accounting. Do you comply with the one that puts you in jail? do you keep 2 books? do you keep seperate books for each country? Then, which do you actually use to make business decisions? These are kind of hard questions to answer, and can require considerable resources.

jjeaff 4y ago

Don't even have to watch and I can guess the why. He built up a business using the dense, relatively wealthy New York ecosystem, despite the difficulty created by heavy regulation. Now, his business has either grown large enough online with non-local customers that he can leave New York and still do well ... Or his social media is enough of a business unto itself to leave. Which I think is fine. But it's also important to recognize that many of these people leaving urban areas like this would never have been able to build a business had they not started their business where they did.

PaulsWallet 4y ago
This is wrong and you should just watch the video before getting on your soapbox. Or at least click on it and see the title which almost certainly tells you why.
MrStonedOne 4y ago
Heavy regulation isn't the issue, its heavy bureaucracy as a stick to beat people with. His ""violations"" were all mistakes on the cities part or auditors trying to pigeonhole things into regulations they don't apply to. He followed the regulations, and that wasn't even good enough. You say he "used the dense, relatively wealthy New York ecosystem," to launch a business, but from their prospective i bet they feel they started a company in their hometown and then their hometown spat in their face in an attempt to get more money.

MichaelZuo 4y ago

It seems odd for NY State's tax office to use relatively tough methods to check tax compliance. Is that commonly experienced by SMEs there?

PaulsWallet 4y ago
At one point in the video, Rossman does imply that he is getting special attention because tech lobbyists (i.e. Apple) are trying to attack him because he lobbies against Apple when it comes to Right to Repair and has done so for years. Not only through criticism on YouTube but in government hearings. Specifically hearings about Right to Repair.
- larossmann 4y ago
  > At one point in the video, Rossman does imply that he is getting special attention because tech lobbyists (i.e. Apple) are trying to attack him because he lobbies against Apple when it comes to Right to Repair and has done so for years. Not only through criticism on YouTube but in government hearings. Specifically hearings about Right to Repair. That's not my claim. I am not saying audits result from that. I am saying, that the fact that my business model was disruptive in nature(show people how to do repairs that our industry has tried to keep secret for a long time) combined with the legislative efforts means it would be stupid for me to do something like cheat my taxes. It's incredibly low hanging fruit if you actually have enemies. A competitor's business 10 years ago asked if I would close for $80,000, and implied he'd be reporting me to state collections agencies if I didn't take the offer. I laughed, and he said this was being cocky. "I pay people on the books, unlike you. and then I rattled off the names of 3 people he was paying off the books.. and he shut up.
- MichaelZuo 4y ago
  That seems like a big claim... he doesn't seem to offer any proof for it.
  - PaulsWallet 4y ago
    He doesn't. It is pretty much a throwaway comment that he quickly moves passed.

protastus 4y ago

He mentions a CPA at the end but I didn't catch any mention of an attorney. I wonder why. The state bureaucracy doesn't care about you. The tax code is enormous and only gets bigger. The bureaucracy's game is to claim you screwed up with minimal transparency. Nobody will volunteer to do a deep dive on your case, nobody has an incentive to help you, and nobody is accountable for their mistakes or lack of effort. It's very difficult to play with these rules, and an attorney can help change the game.

paleotrope 4y ago

If we can avoid saying I'm victim blaming, he clearly made mistakes. If someone is giving you money (front of the line/rush service) in most tax jurisdictions, you are going to owe a tax on that. The website errors of not paying local sales tax well that's just ...dude.... you were seriously playing with fire on that one. Also, if you have a target on your back you have to make sure your stuff is spotless. It's not fair but it's just the way it is.

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tpmoney 4y ago
NY[1] (and I think many states) often exempt services from sales tax. A "rush service" fee would be something I would think falls under a professional service exempt from sales tax. Apple's retail ProCare service used to give you "front of the line" on repairs, and to the best of my knowledge was not a taxed transaction. This would to me be the same sort of thing. [1]: https://www.tax.ny.gov/bus/st/transactions_not_subject_to_sales_tax.htm https://www.tax.ny.gov/bus/st/transactions_not_subject_to_sa...
larossmann 4y ago
> If we can avoid saying I'm victim blaming, he clearly made mistakes. If someone is giving you money (front of the line/rush service) in most tax jurisdictions, you are going to owe a tax on that. The website errors of not paying local sales tax well that's just ...dude.... you were seriously playing with fire on that one. My problem is not owing on the areas where I made a mistake, which were 0.1% of my transactions. By all means, spend a year and two people's time around the clock going through my books to uncover less than $7k, the state is welcome to spend their time the way they see fit, regardless of fiscal viability. My problem was with the starting assumption that my error rate was closer to 50%, before they even read any of my submissions, and maintaining this for almost a year and digging into it. That's a heart attack. Every step of the process feels like you are trying to convince a toddler that PPBUS_G3H is 8.5v when the SMC works and 8.15v when the SMC doesn't, and if you can't get the toddler to understand it you lose your life savings. A 0.1% error rate is a pretty good error rate. Would I prefer 0%... sure... I am human... I spent years trying to grow a business from nothing. I didn't get a bank loan for this or line of credit, I was rubbing two sticks together for years, working out of the park, and taking the time to show everyone else how to do what I do once I learned how to do it at night during the little spare time I had. To do that and be at 0.1% for an error rate after a year of professionals who are financially motivated to find everything they can, I'm actually kinda proud of that.

jokoon 4y ago

That's pretty sad. At the same time, New York is not a simple city. So I can't imagine how things are over there, there is a lot of pressure from a very dense and expensive city. Tax collection is the pinnacle of a well functioning of society. You never really know how those tax agencies make those decisions, and it's not impossible there are politics at play. To be really honest I'm quite happy to live in the EU. We have other kinds of problems, but it seems peaceful, but American problems scare me.

theossuary 4y ago

A lot of people are making this about how unfair New York is, as if the issue is New York (or other liberal cities). Its not. The issue is our government has been hollowed out by big business interests and their political supporters; it's gotten to the point where there's no recourse for individuals. We need to write laws that have actual protections for individuals, and actual penalties. If a law guarantees a right, but has no recourse if that right is taken, well then the law doesn't actually guarantee anything at all. Chomsky has an interesting take that seems relevant too: > And the other leading propaganda theme — and I don’t mean by that, you know, like, just what you hear in the newspapers- read in the newspapers and so on, like the entertainment industry and television and everything else — is anti-politics. Meaning, setting up a picture — it’s called anti-politics — the picture — but a very specific kind of anti-politics — you have to establish the image, you know, get into people’s heads, that the Government is the enemy- the Federal Government. State Governments are okay, because they can be sort of controlled by business anyway, so it doesn’t matter. But the Federal Government is sometimes a little too big to be pushed around, so it’s the enemy. And it cannot be, nobody can dream of the possibility, that the Government is of, by, and for the people. That’s impossible. It’s an enemy to be hated and feared. https://chomsky.info/19960413/ https://chomsky.info/19960413/

Hydraulix989 4y ago
I remember in a follow-up video after Louis moved to Texas mentioning how surprised he was when he found out he didn't need a license to run a repair business in their state.
- _8j50 4y ago
  Yeah, texas likes businesses just fine, consumers not so much.
subradios 4y ago
You can say it's not about liberal cities or progressivism but about "big business" hollowing out the city, but when all of the cities in question are 60 to 80% democrats favored and only ever vote Democrat, as well as the large multinationals that headquarter there making explicit devotionals to progressive causes ("ESG" investing) - you do not escape entirely the idea that these may be related.

susssin 4y ago

New York city is like a really antiquated legacy codebase with tons of redundant checks that were added with good intentions and impossible to remove because you don't know what's truly holding the system together. It's far too complex for an individual to see the big picture well enough to slash the right things, and there's certainly an expectation that lawmakers to continue adding complexity in the name of simplicity but that obviously fails because they're overspecialized to the point where they are so far removed from the problem and without any kind of skin in the game they have no incentive to get their hands dirty and understand the plight of the regulated. Sometimes I wonder if the best course of action is to rewrite, but as with a codebase that's usually a mistake.

jaybrendansmith 4y ago
This is the challenge with all complex systems, from codebases to regulations. You really cannot start from scratch. My software approach is to tackle one component at a time (UI, Database, Messaging, etc.) but you must do it by fiat. Not sure how that is done in politics.
bettyx1138 4y ago
everyone should upvote this comment.

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canucker2016 4y ago

He's getting audited again - his CPA said that Rossmann is the first client who's gotten audited just after the previous audit finished. see https://www.youtube.com/watch?v=YvHt1Q3k-44 https://www.youtube.com/watch?v=YvHt1Q3k-44

canucker2016 4y ago
His payment for the amount due on the first audit was postmarked by the due date but arrived after the due date since he sent the payment via registered mail. Now NY State is going after him for missed payment plus interest. see https://www.youtube.com/watch?v=OXvuOD1D0gM https://www.youtube.com/watch?v=OXvuOD1D0gM
- canucker2016 4y ago
  He also mentions in the video that he was overpaying his taxes because his accounting software wasn't backing out refunded purchases. This was a low four figure amount but he decided he didn't want to file an amended tax return to recoup the money (I assume because his CPA would do the work and the CPA's costs would eat into the money returned).

mlazos 4y ago

I watched about half of the video. Tbh his excuses about not properly counting sales tax to me just sound weird. if you have a business you need to hire someone who has expertise in this area if you grow to the size where it matters. I also find how he only shares his error rate and not the absolute numbers a little sus. I highly doubt the government would be auditing him if there wasn’t a lot missing. Meanwhile the rest of hn is ready to jump on the “I hate the government, it’s so dumb” bandwagon when it’s actually really hard to create a system that works as well as it does. I think it should be simpler and clearer for everyone but it’s a hard problem.

ruste 4y ago
He has! One of the things he mentions in this and other videos is that not even the CPAs he hired can answer if something is legal. He's also got recordings of him calling the city repeatedly about a fine and nobody can tell him how to avoid it, when it applies, or whether what he's doing is even legal.
- Spooky23 4y ago
  Sales tax is a state tax, so calling “the city” is like calling your US Senator about potholes. Guys like this are usually full of it; the people he is railing about conveniently can’t respond.
canucker2016 4y ago
In the video at ~3:30, he mentions that the NY state govt says he owes ~$45.7K for one quarter - he says the amount owing would total high six figures, maybe low seven figures if that amount owing would be extrapolated from one quarter to the whole audit period in question (as he says in the video - more money than he is worth). In a later video ( https://www.youtube.com/watch?v=OXvuOD1D0gM https://www.youtube.com/watch?v=OXvuOD1D0gM ) where he pays the amount owing, he states that he has to send ~$6700 to the govt. So over one year of state govt auditing reveals ~$6700 that the state govt didn't get. But he's also mentioned in the video where he's getting audited again ( https://www.youtube.com/watch?v=YvHt1Q3k-44 https://www.youtube.com/watch?v=YvHt1Q3k-44 ) that he, via the first audit, has discovered he actually overpaid his taxes. He may try to claw back that money in the second audit.