Have you ever tried to buy a business in Connecticut? There are two guaranteed problems – finding a business that still makes money here, and obtaining a tax clearance certificate.
Why is a tax clearance certificate important? Without it, sellers can’t sell, buyer’s can’t buy, lenders can’t lend, players can’t play – you get the idea. The certificate prevents “successor liability”. Now, that’s a lawyer’s term, but a lawyer would tell you that you only want to be responsible for your own mistakes – not the mistakes of a prior owner. Any politician should get that – why own a mistake when you can blame your predecessor?
In our cash-starved state, you’d think the Division of Revenue Services would know, at any moment and to the last cent, who owes it money. You’d be wrong. DRS asks for 90 days. Ninety days is forever. God could create the world 13 times. The Connecticut legislature could pass a budget. Donald Trump’s hair could move.
But I understand the problem. In this hypercompetitive information technology world, our progressive governor has DRS relying on those two beacons of bleeding edge high tech – paper documents and the U.S. postal service. So I have a solution. Dan Malloy should invent the computer.
But hey, you might ask, didn’t someone already invent the computer? Don’t judge – Al Gore invented the Internet, so there’s precedent. And let’s face it, if there were computers, then DRS wouldn’t ask for 90 days, and folks in Connecticut could close business transactions in less time than it takes Trump to fire a cabinet member.
Now, I realize it’s a tough world out there for state budgets. Perhaps every state has this issue. So I went looking for a place with a better solution. And I found it far, far away in … Massachusetts. What does Massachusetts know about friendly business environments? I don’t know – ask General Electric. But what I do know is that Massachusetts leverages a promising new technology called the Internet to turn tax clearance certificate requests in just a couple of days.
I get it. Connecticut would say hey, Massachusetts already had this brilliant computer/Internet idea. We can’t claim it as our own. But as Stephen Friedman, the former chairman of Goldman Sachs, has said, not everyone can be the first with a new idea, but there is no excuse for not copying a good idea quickly. So I would say that now is the time for Malloy to copy our good Yankee neighbors to the north and embrace computers and the Internet.
I say all of this not to bash Malloy. Rather, my concern is for the viability of Connecticut small businesses. It’s one thing for Connecticut to face an exodus of large corporations. After all, rich executives may just dislike our state’s progressive ideology, Comrade.
But if we force small businesses to wind down instead of selling because selling is so complicated, then we are effectively crushing the entrepreneurial spirit that is the backbone of the American dream. For a governor who five years ago rolled out the tourist slogan, “Connecticut: Still Revolutionary”, one might expect him to more enthusiastically embrace modern, cutting edge, revolutionary approaches to governing. After all, we can’t afford to let jobs competitors like Massachusetts get the drop on us on promising new forms of technology. Like the Internet. Or, God forbid, email.
Comer Business Brokers is a full-service business brokerage firm located in Fairfield County and serving the entire state of Connecticut and Westchester county, NY. Owner and founder Irina Comer has more than a decade of experience with mergers and acquisitions of all types. She spent ten years at PricewaterhouseCoopers advising local, national and international companies on transactional issues, including valuation, diligence, structuring and positioning. After obtaining her MBA from New York University’s Stern School of Business, Irina worked in the Mergers and Acquisitions division of Bank of America Merrill Lynch.