GST SPELLS K.A.O.S. but Entropy Express will ''probably'' survive!
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| Title: | GST SPELLS K.A.O.S. but Entropy Express will probably survive! |
| Creator: | Mike Adamson and JJ |
| Date(s): | 1999 |
| Medium: | online |
| Fandom: | multifandom |
| Topic: | Fanzines, Fandom and Profit |
| External Links: | via Wayback, Archived version |
| Click here for related articles on Fanlore. | |
GST SPELLS K.A.O.S. but Entropy Express will probably survive! is an essay written by Mike Adamson and JJ in 1999.
The topic: changing tax laws in Australia and the implications for their fannish empire.
For other examples of financial difficulties faced by these fans, see Nut Hatch Press.
Excerpts
It's times like this when you feel like bashing your head against the nearest wall and asking the gods WHY US???? Or, WHY NOW???? Or, WHY HERE???? What we're talking about is the impending Goods and Services Tax, aka The GST, that is being introduced into Australia at the end of the current financial year. Also affectionately known as the Geeks and Suckers Tax, this is a 10% flat rate tax that is applied, essentially, to everything. Your phone calls, your postage stamps, rent, used car, TV repairs, blank videotape, your dentist's bill, baby's shoes, train ticket, floppy disks. And yes, your fanzines.
First logical question: Entropy doesn't earn a profit, so why should there be GST to pay at all? The answer isn't as simple as the question, but we'll try to keep it at least brief! Zines are not actually legal in this country; they exist in a gray area where you won't get into trouble if you don't get noticed! Now, the ONLY thing that has kept Entropy alive this last year or two is the fact that we can accept credit cards because we have a small business (Leisuresoft) for which JJ runs a Merchant Account. The zines therefore are billed through on Leisuresoft, and they go through as "books." To our accountant and whatever tax inspectors, they were as good as invisible, because books have never seen subject to sales tax. But they will be subject to GST as from July 1, 2000. If people pay by check, the checks go through my bank, and will show up in our personal banking records ... if we receive foreign cash, it'll have to be converted, and will show up on our banking records! We will have to account for the money; all We can say is, "books shipped," because "fanzines" are marginally illegal on copyright grounds, and we don't even want to imagine the consequences if you add in the word "adult!"
By now you're wondering what the price rise will be, what this is going to mean to zine buyers. For years we've been struggling with the "Why are your zines so expensive?" question. We've always answered as best we could, and/but it's time for complete answers ... maybe even a kind of financial statement, right here on DOAW, so that in future you'll know exactly what you're paying for, and why — and to whom the money goes! Bear with mus, and by the bottom of this page you'll know as much about Entropy as we do!
Entropy is still carrying a debt! We were very badly ripped off in earlier years, by Kandi Clarke and Bill Hupe respectively. At one point Nut Hatch was around $9,500 in debt, after filling orders Kandi took money for and never filled, and after shipping to Bill and never receiving payment. There were five people here to help cover the debt, and it has been "refinanced" over and over. Now, Nut Hatch has dwindled to one "financial backer" -- JJ -- and though the debt is down to just under $3,000, it's still a sizeable chunk of money! Each zine has about $3 added into the price, to help pay off this debt — this is how the press stayed alive, instead of just dying on its feet in 1992 or thereabouts! Right now, we still need to sell about another 1,000 zines to get out of the hole forever — and it will have taken JJ TEN YEARS to "trade her way" to the break-even point. Alas, Entropy also needs a new laser printer and new book binder, and as the final blow to make the process more difficult, along comes the GST. (grrrrr) [1]
There is a risk factor in producing zines in future, too, but we are willing to take that risk, at least while we see which way the wind blows ... As we said above, fanzines exist in an extremely shady zone under copyright law in this country. They're not especially legal — not even the gen ones. We've been lucky (we all have), in that they also count as "books," and are not subject to sales tax. The paperwork has always gone through cleanly, no questions asked.
The word "audit" flitters through the mind, and we actually need to get some feedback from readers so that we know that YOU, the reader, can live with the GST system, and the money you'll have to pay from here on. Let's get down to brass tacks here. Zines are not cheap. A lot of readers have been catching up, lately, on a decade's worth of publishing, and up to $1200 per order has been ringing through the bank account. That much going through a small one-person business attracts attention ... and if we try telling the ATO that it's non-profit, oh boy, will it attract attention! So it's pay your GST, or don't get the zines, okay?
The GST is here, but...!: 2000 Follow-Up Essay by JJ
Jane of Australia wrote a follow-up essay and gave an update on GST and her fannish (and personal) business finances:
The GST is here, but...!
Here's the story in the proverbial nutshell, guys, and the sound you hear is JJ breathing a sigh of relief!
Yep, the GST arrived with a thunderclap, July 1 ... and Leisuresoft was registered for its ABN in plenty of time ... and I was ready to start moonlighting as a tax collector, when a chance remark made to me ... and I can't even remember who made the remark! ... prompted me to call the ATO and verify what I'd just heard.
I'd heard right!
For small business, where the annual turnover from business endeavors is under A$50,000, you can choose NOT to collect GST! Traders like myself just PAY the GST on everything we use, "eat" the costs, and don't have to go through the sausage machine of working out profit structures, discounts, pricing, and making GST installments every three months.
Okay ... well, the only good side to the fact that my business has been on a go-slow since I started to travel several years ago is —
You guessed. When you work only half a year, you don't turn over fifty grand! In the last couple of years I've probably turned over thirty to forty, so we are WELL inside the threshold at this moment.
If you've read the soap opera pages, which document the kaos [sic] of my life, you'll know that I'm in Aus more or less to stay from here on. But it will take at least 1 - 2 taxatio [sic] years before I can work up my business to the point where I'm over the fifty-k line.
The best reason for this is, I've promised my husband a good, LONG vacation after he arrives in Aus in October. Both Dave and I have worked very, very hard for this. The monster vacation will put "paid" to this year's potential income (grin), and then I'l [sic] start over, in mid-2001.
So we have a stay of execution. Till about mid-2002, Nut Hatch will NOT be gathering GST!!!
Prices are on the increase though. Other people further up the taxation chain are hitting ME with the GST, on goods that were never taxed before. I have no choice but to pass these costs on, so ...
You have our solemn word that prices will rise as little as possible, for as long as possible, and then — when there's nothing else to be done about it — the plan right now is that the zines will be slowly but surely reformated for a PDF, zine-on-disk lifespan that will pull the price down to about A$8 per copy (not sure how many disks it takes to store a zine yet ... still working on this), and the zines can live forever!
So it's good news for at least the next couple of years, GST-wise! [2]