The class consists mostly of small business owners, many of whom rely on income from government contracts to keep afloat. right there's the problem...
Posted on 08/09/2009 4:51:50 AM PDT by TigerLikesRooster
California Won't Accept Its Own IOUs
By MARIA DINZEO
SAN FRANCISCO (CN) - Small businesses that received $682 million in IOUs from the state say California expects them to pay taxes on the worthless scraps of paper, but refuses to accept its own IOUs to pay debts or taxes. The vendors' federal class action claims the state is trying to balance its budget on their backs.
Lead plaintiff Nancy Baird filled her contract with California to provide embroidered polo shirts to a youth camp run by the National Guard, but never was paid the $27,000 she was owed. She says California "paid" her with an IOU that two banks refused to accept - yet she had to pay California sales tax on the so-called "sale" of the uniforms.
The class consists mostly of small business owners, many of whom rely on income from government contracts to keep afloat. They say California has used them as "suckers" as it looks for a way to bankroll its operations while avoiding its own financial obligations.
(Excerpt) Read more at courthousenews.com ...
The class consists mostly of small business owners, many of whom rely on income from government contracts to keep afloat. right there's the problem...
The Phila. city schools are issuing IOU’s to vendors. Our family does business with the schools (musical instrument accessories) but we won’t do any business with them at this point unless we’re paid up front.
That isn’t necessarily a bad thing.
Is this Arnold’s fault, or the fault of the California voter?
OTOH, The state is claiming that the IOUs are a valid form payment for tax purposes, so it is illogical that it would be invalid to pay your California taxes with them.
So much for my plan to get rich on these things. If the state won't take them, they must not be worth the paper they are printed on. Glad I didn't buy any at 5% of par. I still might be willing to take a chance at about 1%. They might be framed collectibles some day.
Wow that’s a tough one. Suppose one of your competitors will do bussiness on those terms. When (if) good times return you’re out of a lucrative govt deal.
As conservatives, we should be on Calif’s side on this one. As a sovereign state, it should have a right under the constitution to hose folks. There is a reason states can’t file for bankruptcy protection.
And folks should bear the consequences of selling to an insolvent entity on credit.
Bump for later.
She has yet to receive any money so how can the State tax that???
What’s the big deal? All those small businesses can run right down to the bank and get a loan to cover their operating expenses, right? Shouldn’t be a problem with the booming economy.
Has this been confirmed? This article appears to be from an obscure website, and I haven’t seen any other articles asserting this.
http://news.yahoo.com/s/ap/20090730/ap_on_re_us/us_california_ious_2
California contractor paid with IOU sues the state
Wed Jul 29, 8:28 pm ET
SACRAMENTO, Calif. – A vendor who provided 1,200 embroidered polo shirts and uniforms to a state-run youth camp and got paid with an IOU filed a lawsuit Wednesday against the state of California.
Nancy Baird, the owner of an EmbroidMe franchise in Paso Robles, sued state Controller John Chiang and state Treasurer Bill Lockyer in U.S. District Court in San Francisco.
That is wrong on so many levels.
In the end, the people are responsible. They elected the fools that are running the asylum. Maybe next year, they can rectify some of the problem.
IOW
California won’t accept the worthless crap IOUs it foists on vendors and taxpayers. I hope and prey they lose in court
I have to ask: Doesn’t $27,000 buy a whole trainload of polo shirts?
Has this been confirmed? This article appears to be from an obscure website, and I haven’t seen any other articles asserting this......
Go to google news and you will find many articles for “Nancy Baird” who is suing
“Uh Duh!! Like they are like worthless dude!”
I’ll buy all you have for 50 cents on the dollar!!!
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