Internet sales tax
For decades, small businesses in one town have met the needs of customers in another town – or even another state – because they could serve special needs in terms of product or service. Traditionally, this was done by mail or telephone. The Internet has vastly accelerated that trend and expanded opportunities for retailers to reach new markets.
Various federal government definitions of what constitutes a “small business” have led to confusion when trying to find a universally agreed-upon definition. Some define a small business by the number of employees, others by the total amount of annual receipts, or a combination of both. Further complicating the matter are the arbitrary definitions used by some Members of Congress to determine the exemption level for small businesses when collecting local and state sales taxes.
For our members, we know there is a lot riding on whether or not the Marketplace Fairness Act moves through Congress. So, we did some research to find out how people really feel about the legislation and our findings confirmed what we know. For example, when presented with a description of the Marketplace Fairness Act, a majority – 84% of consumers and 75% of small online retailers – opposed the legislation. Please share this infographic and help us spread the word about this flawed legislation.
The true cost of compliance for small businesses if Internet Sales Tax legislation is enacted would be a significant, on the order of 15 to 17 cents for every tax dollar collected by the merchant,
For those who aren’t aware, NetChoice is a coalition of e-commerce and online companies that strives for “convenience, choice and commerce” in the online marketplace.
WE R HERE is a coalition representing retailers, but we are consumers of Internet commerce, too.
It turns out that death and taxes may not be the only certain things in life. It seems safe to add two more certainties: a big company’s willingness to squash a smaller competitor, and a tax collector’s desire to get someone else to do his or her unpopular job. A new effort in Washington marries the interests of tax collectors and big businesses at the expense of innovation, small businesses, and consumers. Together they are pushing for new burdens on the thousands of small companies that sell via the web.
Web enabled retailers from around the country join together to lend their voice to the public debate around innovation, job creation and small business tax policy.
A sales tax generally applies to transactions within a state, or a particular jurisdiction within a state, and is paid at the point of purchase. A use tax is a type of excise tax, paid by a purchaser who stores, uses or consumes within a state or other taxing jurisdiction any tangible personal property purchased from an out-of-state seller (unless the vendor charges sales tax).
For 20 years, state taxation of online retail sales has been governed by the 1992 U.S. Supreme Court decision in the case of Quill Corps. v. North Dakota.