2. What kind of paperwork would you view as tolerable?
Photocopy, possibly notarized, of a state sales-and-use tax permit.
In other words, something that every small business has lying around.
Our small business does not have a state sales-and-use tax permit.
We sell services, which are not taxed in California, and sell much of
our business interstate.
Keep in mind that there are also sole proprietorships, etc., that
exist legally but with no paperwork. These are legal enough so that
the IRS wants them to pay taxes, after all!
Good point. My consulting business, Nebula Consultants, was run this
way for years.
Even large businesses will have a tough time dealing with rules like
`send in your sales tax permit'. For example, the only Internet
access at the New York Times is in John Markoff's office. He doesn't
deal with the incorporation of the Times, or its sales and use taxes.
Asking him to get a notarized copy of one of those things is way too
burdensome. Nobody required him to do any of that to get the domain
name "nyt.com", and it's a good thing, too, or the NYT bureacracy
might have squelched his access, just over the hassle involved.
At my little company Cygnus Support, we had a prospective customer who
wanted our Federal Tax ID number before they could issue us a check.
They ended up settling for checking us out with Dun & Bradstreet,
since we consider the tax relationship to be private between us and
the government. Having been burned on ``Social Security'' numbers, we
aren't about to go handing out our government-assigned ID numbers to
anybody for any purpose.
Most states have a `Department of Corporations' (in Calif it's under the
Secretary of State) that is the official registry for corporations. These
are public records, unlike tax records, so there should be no trouble for
the CA to get a copy of a company's registration if it really wants to
see paperwork before it certifies a company. Asking the requestor to
provide it is excessive as far as I'm concerned. Individuals and companies
should not have a burden of proof to prove their identity; anyone who
challenges their identity should have the burden of proof.
John Gilmore