"The Senate passed the bill by a vote of 69 to 27, getting support from Republicans and Democrats alike. But opposition from some conservatives who view it as a tax increase will make it a tougher sell in the House. President Barack Obama has conveyed his support for the measure."
http://bigstory.ap.org/article/senate-b … -purchases
Things are about to get even more... Interesting.
This is really bad news for anyone running a business on the Internet. Especially for small business that can't afford purchasing software to track the sales per state to charge the appropriate sals tax based on the customer's location. The extra burden of this overhead will run more companies out of business and cause more unemployment. Is this what Obama wants? I hope the House rejects it.
Agreed. If a state wants a company to collect their sales tax for them, they should be supplying at least the appropriate software to do the job.
This has been a long time coming, but it was inevitable that it would happen - states are "losing" far too much money to think they aren't going to put up a major fight to get those funds into public hands. With Amazon and other large net retailers shutting down the shenanigans states pulled with their "back door" physical presence laws it had to go federal and it has.
It's not all bad, though - lots of hubbers will benefit, and nearly all of us stood a chance of losing a lucrative affiliation if the feds never involved themselves.
Thank you, relache, for sharing! Passed the article link on the social networks, too.
This is not QUITE as evil as many people think.
1. Businesses that gross less than $1 mil from online sales will be exempt. (This MAY cause problems for distributors like Etsy and Smashwords, though).
2. The software WILL be provided and paid for by the states...at least in theory. However, how are we going to integrate 51 different tax softwares. Well, no, 47, as four states do not collect sales tax. States will also be obliged to collect it centrally rather than forcing retailers to worry about thousands of county and local tax authorities.
I haven't really managed to work out which side I'm on here, although I'm in favor of anything that makes taxation simpler, this makes it easier for individuals and harder for businesses...
I'm torn as well. I think it does level the playing field for online and offline businesses. The showrooming effect is destroying brick-and-mortar retail. (I did a whole blog post on it.) And the Internet retailing giants are getting an unfair advantage.
While I am an Internet retailer and this could impact me, I'm hopeful that the filing process will be streamlined for small businesses. In the past couple of years, I've been hit up by a neighboring state to which a client order was delivered. It was less than a couple thousand sale if I remember right. I had to fill out a 6-8 page return due to nexus sales tax issues. If I have to do that for all 47 states, I'll definitely have to pay my bookkeeping service a sizable sum to keep track of it all.
As mentioned in the article, I think one of the biggest issues is the overreaching that states can do to enforce their laws on out of state businesses. Then local and county? Ridiculous.
Well, we'll see how it goes in the House.
Heidi, do you gross over $1 million per annum from online sales alone?
Oh gosh, Jennifer, I wish I was an Internet millionaire! But even though I haven't reached that magical mark yet, I've already had the nexus issues to deal with. I'm so hoping that the benchmarks get set equitably for small business and that we won't have to go through a major process of having to prove we're exempt in every state that collects sales taxes. That would be a MAJOR project!
This is a fascinating post! It will change the face of business online, but to what extent is hard to comprehend until it does pass if it does. I feel it is likely.
I am hearing in my home state that tolls on our roads will be reactivated...another way for this state to make money but in the long run I agree with others that it will hurt local business. One remedy idea seems to create a new problem, just as in your post.
Thank you for the info!
There's a case to be made for both sides of the argument, which is why I left my comment at "interesting."
This has been a hot button debate that has been on-again, off-again since the 1990s, and after 20 years of e-commerce, it may be time to try something that's never been tried before just to see what happens.
Well if this certainly happens in the U.S....then our brown nosing suck up UK government will no doubt follow suit with a similar tax.
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