Today's $100 winner is TheMentalInstitute! We're giving away $100 per day from now until I leave for Comic-Con on July 20th. To participate in the raffle, all you need to do is vote on five submissions while logged in. Every day I run a raffle script based on activity from the previous day, and a winner is declared!
Tomorrow is the one year anniversary since the redesign launch! Almost one year ago, we launched a new version of NG with 100% compliant html and a dramatically overhauled back-end. Every single page underwent a dramatic visual overhaul and we introduced some really pretty audio visualizations for the Audio Portal. It might not sound like a lot in retrospect, but it represented two years of hard work by the team and a lot of stress.
So what has happened in the year since? That's what this post is all about!
We announced winners for the Rock Out contest, showed off the redesign at Comic-Con, celebrated Clock Day, had a Castle Crashers music contest (many of the winners are in the final game), unveiled a spiffy reskin for Madness Day, enjoyed our second annual Treasure Hunt, did some pumpkin carving, made some spooky Flash for a Halloween competition, got charitable, unveiled the Penicorn plush and Tankman figure, gave away a bunch of Wacoms, won XBLA game of the year on Kotaku with Alien Hominid HD, painted some Munnys, celebrated Pico Day, represented at Big Apple Con in NYC and announced the winners of our first annual awards, featuring tank trophies that I still need to send out (OMG I'M SO SORRY).
But that was all on the front! In the back, a lot of things have happened, both good and bad.
Despite the redesign launch and a great turnout of NG folks at Comic-Con, Castle Crashers was still far from being finished and required an endless amount of programming. With the redesign out of the way, it was time to go into crunch mode. Multiplayer vs arenas were in place a month later for PAX, but a lot more levels needed to be built to fill out the overly-ambitious world map we laid out. Things were moving along when some bad news arrived...
Over the past year I had registered a sales tax ID for Newgrounds, so that we could launch the NG store and pay PA sales tax. I began to file our quarterly sales tax payments, usually in the $5-20 range. We only have to pay 6% on goods sold to PA residents, so it doesn't add up to much.
In October, I received a disturbing letter that we would be undergoing a PA sales tax audit. We were apparently flagged because we have reported income year after year, but never paid any state sales tax until recently. I called the auditor to schedule and discuss the audit, at which point I explained how our revenue is traditionally from advertising sales and only a small amount comes from the store. The auditor's response was, "Well surely you've purchased items you owe PA sales tax on."
The cold reality set in. We weren't even aware that for every on-line purchase we made, we were required to voluntarily file a "use tax" of 6%, because we use that item in PA. This is actually a requirement of every individual who buys stuff, but the government only goes after businesses because businesses keep records of their purchases and most individuals don't.
The audit was scheduled to run from December 17th to the 24th - that's right, Christmas Eve! What better way to ruin the holidays? To prepare for the audit, I had to gather up the following documents:
1) Receipts and invoices for every dollar we spent from 2004-2007, to prove we didn't owe sales tax.
2) Records of all income generated from 2004-2007, to prove it was from advertising and not from goods sold.
3) Payroll records from 2004-2007, to show everyone was paying proper local taxes.
I'm not much of a bookkeeper, but I'm good at holding on to stuff, so over the course of November through December, I was able to gather and organize just about everything from the past four years and get it off to the accountant. This whole experience was completely soul crushing; having to put together a defense for the past four years of NG, to be scrutinized by someone who wants to get their hands on as much money as possible.
The audit started on schedule and the auditor was quick to note that for every item not documented, we WOULD be charged 6%. If we had a credit card statement showing something was purchased at a location in PA, but didn't have a receipt, it didn't matter because credit card statements were inadmissible (I heard they recently started accepting credit card records).
The one thing I kept telling myself was that at least the audit would be over by Christmas. That's not how it works, though. That was just the last day the auditor spent going through the books. The next step was to wait for the report on what we owe, which was scheduled to arrive on New Years Eve - another holiday ruined. Final list in hand, I had one month to gather up any remaining invoices and receipts, to cancel out any items we could prove were bought in PA.
A lot of the small stuff wasn't even worth digging up, but I managed to get invoices together for other big ticket items that were bought in PA. We DID owe some valid taxes, but the drain on time and accounting expenses was the real burn.
Despite all this, we still managed to finish Castle Crashers! It didn't make it in time for Comic-Con, but we came close enough and I'm just happy to be done. Kotaku has posted some pics from E3.
Although much of my time has been spent programming Castle Crashers, Liljim, PsychoGoldfish, Bob, Tim and Rob (and before him, Ross) have been diligently working on big things for NG. This year has been about INFRASTRUCTURE, which I'll explain TOMORROW.
