Bond: Former SBA Administrator ‘Laughably Wrong’

  WASHINGTON, DC – Yesterday in The Hill newspaper, former Small Business Administration (SBA) administrator Hector Baretto claims that SBA’s small business size standards for small business were done so with brick-and-mortar stores in mind, and not online retailers. In response to this claim, Phil Bond, executive director of the WE R HERE Coalition and former Under Secretary of Commerce for Technology, released the following statement:

 “The former SBA administrator is the victim of sloppy staff work, and probably did not intend to mislead the public with his recent opinion piece. In that piece, Mr. Baretto wrote that the SBA’s size standard for small online retailers – set at $30 million -- was established with brick and mortar retailers in mind.  He should know that there are 69 different kinds of retail businesses as defined by the SBA and each one has a size standard. Moreover, under “Subsector 454: Nonstore retailers” there is listed category #45411 “Electronic Shopping.” For Mr. Baretto to suggest that the size standard was never intended to refer to online retailers – given his role at SBA -- is laughably wrong and nonsensical.

 “If Mr. Baretto has a problem with the $30 million definition, his problem is with SBA’s long-lived and meticulous process.

 “Further, he also misled when he wrote “no one ever intended that ($30 million) figure be used to exempt online businesses from collecting and remitting legally owed taxes.” SBA’s intent was simply to define “small” in the case of non-store online sellers. The fact is, today no small business is required to collect and remit sales taxes for any state in which they do not operate. They cannot be hounded and sued by the tax collectors of any state except their own. There was no conception that the law would be changed in a manner that would throw small businesses to the wolves of out-of-state tax collectors.  Moreover, in those states in which online retailers live and work, they most assuredly do collect and remit taxes on sales there.

 “Contrary to Mr. Baretto’s aspersions against eBay, the only multinational online retailer that is not collecting and remitting taxes in all the states in which they have a presence is Amazon. If Amazon would simply collect sales tax in the 46 states with a tax, state tax collectors would get most of the revenue they desire. Instead, Amazon is insisting on an ill-informed piece of legislation that would require companies making less than $100,000 a year to be burdened with the same collection requirements that go to Walmart and other big-box retailers. The business reason for this seems self-evident: they want to eliminate thousands of small competitors.

 “If Congress agrees that small businesses should not be harmed by a new Internet sales tax bill like the Marketplace Fairness Act and should not face lawsuits and enforcement action in far-away states, then it is important to figure out when a small business is a small business.  And when it is a big business.  Again, the SBA actually has an office that does that already. One would have thought that a former administrator of the SBA would have known that.”

 For more information about the WE R HERE coalition and its members, visit www.werherecoalition.org.

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 WE R HERE is a coalition comprised of small business retailers around the country who are using the Internet and are coming together to ensure government policies are enacted that create a fair marketplace for all types of retail businesses to thrive and innovation to prosper. WE R HERE gives small business online retailers a unified voice, demonstrating to government policy makers and opinion leaders the positive role of online small business retail in the 21st Century economy. The coalition effort mobilizes online retailers to work together to protect them from misguided and predatory laws and regulations that could kill jobs and undermine innovation.

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