Veterinarian's detective work pays dividends

When I opened my practice in 1992, there was no business license fee, or tax, in the city of St. Louis, Mo. Years later in the late 1990s, the license collector sent notice that I had to pay a business license fee that was calculated based on how many people I employ. They called this a graduated license fee.

I called local colleagues and found that some were paying the fee, some were not, and still others had never even heard of it. I paid the fee.

More mysterious fees

Several years later the city started calling the fee a service business license, and the fee continued to increase as my practice grew. It finally hit $675 per year. Then, in 2007, the city introduced the retail sales business license, for which they charged me another $675 per year.

Again, I compared stories with local colleagues, and again, results were all over the board, with one doctor not paying a thing for either license, one paying both and one paying only the service business license.

Twice I wrote letters to the city license collector asking why I had to pay both fees, when my practice was a service business rather than retail store. There are only 11 practices in the city. I also asked why there were no standard license fees. No answer, no surprise.

After three years paying both licenses, I finally got a stubborn streak and decided to test the situation. I didn't pay the retail sales business license when it was due in April. In August, the city sent me an invitation to a "pay-your-tax fair." They had lined up people to help business owners fill out forms and collect money. I politely thanked the city for the invitation, but declined to attend.

Squashing a suspicious pitch

A month later, a city employee paid me a visit. Mr. So Smooth, as I call him, pulled out the graduated retail sales license form and asked me to fill it out and pay him. I explained that I didn't believe that I should have to pay the retail sales fee because the practice is a service business. He then said I had been overpaying that fee—it was really only $200, not the $675 I had been charged in the past.

I asked why, then, the license collector application and the website called it a graduated license. Mr. So Smooth told me that there was no place on the city website or anywhere else that I would be able to find information about the $200 only fee, but he was "telling me today" I could pay him the $200 right now for the license. He also told me that he would remove the clinic from the list for a city retail sales license after I paid.

I pointed out that if he was correct, then I had way overpaid the license fee for three years and would be due a refund. Interestingly, he told me I would never see a refund. I began to wonder who this guy really was and where my $200 might wind up. I declined to pay because I did not owe, and he left.

Persistence pays off

Once more, I appealed to the city license collector in writing, detailing my conversation with Mr. So Smooth. I asked for a refund for the three years of retail sales business license fees I had paid. And I asked whether Mr. So Smooth was really a city employee, with so many discrepancies in the information he provided.

At this point, I decided to send a letter to the Missouri Attorney General's office, and enclosed a copy of my letter to the city license collector. I asked whether the city employee really worked for the city and whether there was an attempt at fraud on his part.

This time I got a response. The city license collector called me the very day he received my letter. He apologized for the charge for two business licenses, promised a refund and assured me that Mr. So Smooth really was a city employee who was mistaken about the fee. He also promised to remove me from the list for the city retail sales license immediately.

Within two weeks, I received a $1,900 refund—and I haven't been asked to pay the retail sales tax ever again. Sometimes being stubborn and doing your research pays dividends.

Author's note: At the start of 2014, I contacted three veterinarians whom I had talked to in 2007 and 2010 for a follow-up. One still pays both licenses, one only pays for the service business license and one pays neither license.

Joan M. Freesh, MS, DVM, owns St. Louis Cat Hospital in St. Louis, Mo. Please send questions or comments to ve@advanstar.com.