My View: The Marketplace Fairness Act and e-commerce businesses
Proponents of the Marketplace Fairness Act (so named because it purports to make all retail sales “fair”) believe that no consumer should escape paying his or her fair share of sales tax. Indeed, that sounds “fair” enough. All of us appreciate driving on pothole-free roads or knowing a firefighter will show up when the house is in flames. So why would anyone oppose a bill that requires collecting taxes that are due? Here’s why we’re opposed: The law would probably spell the end of our family-owned business, for several reasons.
So far this year, we’ve shipped orders to 2,514 different customers, in all 50 states. This means we would be obligated to calculate the individual tax rates for each customer based on the sales tax rate for that zip code on the date the purchase was made, then file returns in all 46 states that collect sales tax. By contrast, a brick-and-mortar store would file one state sales tax return. That’s a discrepancy no one is mentioning when talking about how this bill “evens the playing field” for all merchants.
Audits also pose a threat, since under the current law I could be summoned out of state to argue my case. Pity the online business that gets audited by more than one state.