Insurance, Industrial Classifications, IRS

Earlier this week I spent the better part of two days jumping through various hoops in order to be considered for a more comprehensive health insurance policy that is offered to business groups, as opposed to individuals. In other words, I had to demonstrate that I have a business in Colorado. But since I lack a business history here, I also had to demonstrate that my application was legitimate.

It didn't help matters that last spring I filed for an extension for my 2007 taxes, giving myself until October 15 to send in the paperwork. The underwriter needed to see my return, which doesn't exist....yet. However, my insurance broker got them to agree that it would be sufficient for them to see evidence that I filed for an extension. Until a few years ago, the IRS would routinely send confirmation of extension requests to the taxpayer. But they ended this practice, probably to save money, and so I had no proof that I had requested extra time. I had no choice but to call the IRS and see if they would send me something that indicated that, yes, I had filed for an extension. It took three phonecalls and nearly three hours of waiting on hold (at least they play classical music) before I succeeded in having them fax me the document I needed. The process might have been shorter had I known in advance that I'd need to be in front of the fax machine when it arrived, as they won't fax personal tax information somewhere else. Since I didn't have a fax number, I got one from Efax, and then - while the IRS employee waited patiently on the line - downloaded the software so I could open it. It worked. I felt a tiny sense of triumph over the vast tax bureaucracy.

Compared to that, registering my business in Colorado was a breeze. I registered my trade name - Mixed Media Mosaics - at the Secretary of State's Office online, then took proof of my registration to the Colorado tax department to get my license to do business. Before hand I had looked at this form online to see what information I'd need to provide. They ask applicants for their industrial classification - it turns out it is 711510, Independent Artists, Writers, Performers, which lumps a lot of people under a single category including but not limited to: storytellers, poets, orchestra conductors, taxidermists, ethnic dancers, motivational speakers, art restorers and celebrity spokepersons. In previous years, according to the website I consulted, many of these job titles were separately classified.

Then it was off to the City and County of Denver Treasury Division to get a license to collect their sales tax, separate from the state tax. Whoever called my home state "Taxachusetts" had not been to Colorado, where certain cities, counties and districts collect all kinds of taxes. When I sell my art here, I will charge a tax rate of 7.72% that includes the state sales tax, the Denver sales tax, the Regional Transportation District tax, the Football Stadium District tax and the Scientific and Cultural Facilities District tax. And then I get to pay a monthly Occupational Privilege Tax (OPT) for the privilege of being in business. This would all be quite entertaining if I could file my sales tax returns online, as I did in Massachusetts, simply entering in my revenues and having the website calculate what I owe. Unfortunately, Colorado is about four years away from having such a system in place. So, I will receive personalized tax booklets on which to write in ink who is getting how much tax. Perhaps when I fill out my first one I will blog about it under the title "Insane-making". Meanwhile, Colorado is kind enough to offer free tax classes to help newbies decipher it all.

But all of my phoning, faxing and filling out forms paid off. My application for the health coverage I wanted was approved.