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Technologist supports online taxes, criticizes coalition opposition

Online taxes continues to be a sore subject as advocates and critics clash over the idea that e-retailers should require consumers to pay state sales taxes, and one technologist charges that critics of the legislation are basing their arguments on 20 year old data.

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Coalition against proposed internet tax

We recently reported on a coalition fighting against proposed federal legislation that could implement an internet sales tax to businesses that are solely online, which the coalition says could impose a burden on small businesses.

In 1992, the U.S. Supreme Court made the decision that forcing online businesses or individual sellers to pay sales tax for states in which they do not live would be burdensome. However, some have decided that they want to override that decision and make online retailers pay sales tax based on which state each individual sale came from.

That means that online retailers would have to calculate every transaction and stay on top of each state’s changing sales taxes. Technologist and advocate for the Marketplace Fairness Act, Sten Wilson tells AGBeat there are tools to simplify this accounting process that make it simple, and automatic to collect these taxes.

The We R Here Coalition is taking a stand against these taxes, seeking to take a united front, to come together and loudly voice why this is a bad idea, not just for the business owners themselves, but for the country. Anyone can get involved, through the coalition by signing up and/or signing the petition, claiming the nation needs to “create a fair marketplace for all types of retail businesses to thrive and innovation to prosper.”

Arguments based on facts from 1992?

Wilson asserts that the arguments the Coalition (which he says is backed by eBay) puts forth are founded on arguments based only on 1992 facts. “The very same API protocols used to provide real time shipping to over 40,000 different postal zip codes was not available in 1992 either. The very same API protocols now provide real time tax calculations in less than 13 milliseconds to any enabled shopping cart or checkout platform.”

“In addition,” Wilson continues, “small businesses such as mine receive indemnification against any audit issue that might arise from wrongly provided state data or applications by CSPs. Twenty four states currently utilize one standard e-file remittence process making it much. much easier for millions of Internet merchants. The current proposed legislation S.1832 the Marketplace Fairness Act requires any state seeking collection authority to adopt similar simplification standards.”

Many believe implementation of these sales tax are regressive, but Wilson points to the unequal application of taxes online and offline, with Michael Mazerov from the Center on Budget and Policy Priorities bringing to his attention the ongoing impact of inaction upon those families with limited or no access to the Internet and sufficient credit, with many states (CA, CT, NY, RI, etc.) compensating for evaded sales and use taxes by increasing property taxes, existing sales taxes, and other state fees.

Additionally, Wilson points out that families without credit and access to the web pay higher taxes at local businesses as their “wealthier counterparts” skip taxes by purchasing goods online, without consequences typically reserved for evading any taxes.

Benefits of automating sales tax processing

“Many states will also benefit through automating sales tax processing,” Wilson notes. “New efficiencies ensure a greater percentage of every tax dollar honorably remitted fund intended programs and service supported through residents ballot initiatives. This is another example of how the proposed legislation will assist in providing states the means to undue other harmful and costly tax policies lowering individual liabilities.”

Wilson gives credit to eBay for “exploiting” the loophole for so many years, “But now when state universities, medical, and infrastructure can no longer keep up with constituent supported ballot initiatives we all need to look at what is best for individuals, families, businesses and governments,” he tells AGBeat. “The very same technology enabling efficient and profitable marketplaces on the Internet greatly simplifies tax processing increasing profitability for all businesses.”

Attitudes of eBay and NetChoice

After attending many hearings on the issue, Wilson says he is “disgusted” with the attitudes displayed by eBay, NetChoice, and Overstock who all maintain the 1992 assertion that the taxes are “too burdensome,” despite companies like Amazon supporting legislation the enable States’ rights to “efficiently collect taxes already due.”

Wilson closes with the notion that, “Back in 1992 the smartphone did not exist nor did the millions of technological advances making the Internet marketplace a vibrant reality. Today in 2013 I can process credit cards with my smartphone or iPad, and my sales tax processing is completely automated providing my business with new found efficiencies easily eliminating the costly legacy administrative burdens of 1992. It’s pretty obvious to me what eBay is so frightened of.”

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Marti Trewe reports on business and technology news, chasing his passion for helping entrepreneurs and small businesses to stay well informed in the fast paced 140-character world. Marti rarely sleeps and thrives on reader news tips, especially about startups and big moves in leadership.

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4 Comments

4 Comments

  1. Keith Yockey

    January 22, 2013 at 11:43 am

    What the article fails to address are the actual costs to businesses both in paperwork, IT cost and fees. Many estiments show this cost to be as much as 15% for every tax dollar collected.

    There is a reason why only 24 States have joined SSUTA. It too is a flawed system that takes away States’ Rights to tax as they see fit.

  2. WE R HERE Coalition

    January 31, 2013 at 10:49 am

    When something sounds too simple or too good to be true, it usually is. That is the case with the claims in this article. Wilson argues that tools are available to simplify the burden of the potential Internet sales tax-collecting process. While we at WE R HERE would like to believe in Mr. Wilson’s magic software solution, these tools may not be as ready-to-use as Wilson claims.

    Should the federal government complete its mandated over-reach and force small web-enabled retailers to become tax collectors, the potential of having to assess, collect and remit sales taxes from customers in nearly 10,000 jurisdictions is a burden many business owners cannot handle. Take Doug Shaddle. He points out in the recent article “Looming Internet Sales Tax Puts Pinch on Online Retailers” in Engage Today that if the Marketplace Fairness Act passes, retailers — many of whom have little or no help running their business — would need access to accurate, nationwide sales and use tax jurisdiction information.

    Shaddle goes on to note:
    “Today, this is done using a process called ZIP code taxation where the customer’s ship-to ZIP code is used to determine their tax.Although ZIP codes provide an easy way to determine sales tax, they have inherent characteristics and limitations that consistently cause ongoing and expensive problems for tax jurisdiction assignments.First of all, ZIP codes don’t always correspond to jurisdiction boundaries. In addition, ZIP code coverage changes frequently.Further complicating the landscape, some states require that jurisdictions correspond not just to ZIP code requirements, but to political or census boundaries as well, which ebb and flow along with local populations.”

    Needless to say, more needs to be done to convince small web-enabled retailers that collecting sales taxes for states where they do not live, have no presence and receive no government services is not a burden on them and their business. It is irresponsible for the government to put the burden of becoming a tax collector on the back of America’s web-enabled retailers.

    • FedTax

      March 10, 2013 at 5:57 pm

      The software is not “magic” and you (“We R Here” coalition) know it.

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Business News

Who will get to work from home once COVID-19 stay-home orders are over?

(BUSINESS NEWS) Many large tech firms review and update their work from home policies. This could be presented as THE biggest work perk of 2021.

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The large tech firms that we all know and use frequently are making big announcements on their timing and policies for their employees to work from home as updates on COVID-19 come in.

Square and Twitter have said many employees will work from home indefinitely – even after states begin to open back up. Google, Facebook, and Microsoft have all extended dates on returning to offices. You can read more details here on The Verge.

Let’s break down some pros and cons – especially if this means that working from home will become the hottest recruiting tool in the future. Like ping pong tables and Friday at 4pm beer carts once were.

Some high-level things that contribute to why people love (or tolerate) their W2 jobs:

  • They like the PEOPLE they work with
  • They have a feeling of purpose, and genuinely enjoy the work
  • There are miscellaneous perks (gym membership reimbursement, free cafeterias, personal development workshops, tuition reimbursement, travel opportunities)
  • Their employer helps to pay for healthcare benefits, and makes 401K contributions
  • Their team rotates, and they get to work from home once in a while*

*This is nice to allow some flexibility. Employees can choose to treat their morning how they would like (maybe wake up a little later, or enjoy their coffee at a coffee shop). It allows them to not rush out the door to sit in traffic, or on the bus or train. They can take the day off of wearing real pants, and work in pajamas. Heck, they can even save time on Saturday or Sunday by doing the laundry on their work from home (WFH) day. It could also be a great opportunity to fit in doctor appointments, or have real quality focus time – missing less of the work day.

This is NOT an implication that people work less that day, in fact working from home, you usually work more because there are not things that force you to break up the day like the commute, meetings, or lunch with your colleagues.

Some high-level things that might contribute to the desire to be an entrepreneur:

  • Your work is a main piece of your identity – usually being a product or service that YOU created, and it leverages a perfect marriage of your talents, skills, and passions
  • You likely get to be your own boss, and make your own creative decisions
  • You constantly have the opportunity to learn, and this can be great for those who love the constant change and challenges
  • It’s just never really worked out for you to work for someone else, or for a corporation
  • Something drives you to build something of your own
  • Working from home* in all its glory

*A common misconception of the entrepreneurship or freelance lifestyle is that you work from home or a coffee shop, and it’s oh so very sexy and freeing, and you get to do whatever you want whenever you want. While arguably, yes, you do have more control over your schedule, and there are perks to your own business; likely you are working 24/7, and wearing every single hat from the Producer to Customer Services to Finance to the Accounting department. This requires you to be really open to learning or knowing what you don’t know, and possibly hiring experts.

So, moving forward, will the “you can work remotely! From wherever you’d like” become the hottest recruiting trend of 2021? Here’s why we predict that may not be the best way to move forward.

  1. People are social creatures. Working from home sporadically vs 100% of the time are two completely different things. You could possibly lose the momentum with your teams if they no longer know and trust one another. Plus, no doubt there will be turn-over, and when there are numerous parts and teams, it can be helpful for them to have in person experiences together.
  2. Does this make sense for the commercial real estate industry, and the leases that have been signed? It’s unlikely that many large corporations just perfectly timed their leases that align with COVID-19. Many will likely want to bring people back just for that fact.
  3. All of this takes an enormous amount of money, additional tech support, and infrastructure, (not to mention mailing costs for all office equipment, etc.) and it’s not possible that only the most profitable firms will prevail and be able to do this.
  4. How would large cities (read: high cost of living) like the Bay Area be able to retain talent, and/or why would you pay to live there if you can live anywhere. This could drastically shift urban planning and development.

We just don’t see it moving all the way to the extreme of all knowledge workers working from home indefinitely. If you want to see how people are feeling about working from home, you have to check out this Buzzfeed article, “Zoom Fatigue is Real, And You Probably Have It If You Relate to These 16 Tweets.”

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Weight Watchers lays off 4K employees on a brief Zoom call #cold

(BUSINESS NEWS) WW fires thousands of employees over Zoom, no questions asked or answered. So much for Wellness that Works, live up to your motto.

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WW International, formerly known as Weight Watchers, fired thousands of employees on a 3-minute phone call on Thursday, May 14. The call was muted so participants could not ask questions. Employee emails were closed by the weekend.

It is unclear exactly how many employees were let go, with some reporting up to 4,000. WW has declined to report the number. Laid off employees were both part-time and full-time. Some had been working for WW for more than a decade.

WW has been slowly shifting its services online, including building a comprehensive app for users to track their food. Founded in 1963, the weight loss company has come a long way from paper-and-pencil weight tracking. In 2018, the company changed its name from Weight Watchers to WW, adopting the slogan “Wellness that Works,” in a move to fully embrace the trendy wellness and self-care movements that have gripped younger audiences.

CFO Nick Hotchkin said, “It wasn’t practical to have all of the conversations be one on one.”

WW has staked its claim on empathy. They have cultivated a community of people motivated to lose weight, and support others on the same journey to also live a healthier lifestyle. Many WW employees are former customers who were so committed to the mission they wanted to join the community as a coach or meeting leader. The company offered many part-time roles that fit the schedules of full-time mothers, their primary demographic of clients from its inception.

Firing swaths of employees over Zoom calls is the latest form of cruelty in the employment chaos that the coronavirus pandemic has inflicted on the economy. But companies can make choices – especially international mega-companies that bring in more than a billion dollars in revenue annually.

Has WW no sense of irony? Just two days before this call, WW announced a free, four-week virtual experience led by Oprah Winfrey, a WW investor, client, and champion.

“Now, it’s more important than ever to be and stay well and strong. Together, let’s reset, refocus and find clarity in what matters most,” Oprah said of the program. Apparently, thousands of employees are not considered an asset to the togetherness of this occasion.

Of course, WW like many other companies has a right to let go employees in anticipation of changes in business. But if caring for your employees, and conducting layoffs with empathy, grace, and compassion is not on the list of “what matters most,” then WW is sorely lacking mission alignment. It is severely disappointing to see a company driven by a compassionate mission act in such a callous way.

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Business News

Facebook staff now remote – but move away from the Bay, and pay gets cut

(BUSINESS NEWS) Mark Zuckerberg might reduce remote worker salaries if they move to cheaper locations. Do you include using Facebook’s private jets in your cost of living, Mark?

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Facebook CEO Mark Zuckerberg held a company-wide livestream call on May 21 to announce to its 50,000 person staff that Facebookers will be allowed to work from home indefinitely. With more staff requesting an ongoing remote option, and the future of work in the United States questionable as the economy begins to reopen in the wake of the first wave of coronavirus infections, Zuckerberg thinks that by 2030 more than half of Facebook staff will be working remotely.

The news may have been a relief for workers wishing to continue working from home, but the WFH option is conditional. Staff may qualify for permanent remote work if they are already part of a team that supports remote work, have approval from their group leader, and have strong recent performance including two meets-all expectations or above. It is unclear what it takes to attain a “meets-all expectations” rating when many employees are adapting to work from home conditions without home offices, and with children out of school.

Workers must report to Facebook by the beginning of calendar year 2021 whether they have moved, and to where. Zuckerberg said salaries would be adjusted according to median income, and cost-of-living in the employee’s new locale.

Zuckerberg claims that this situation presents an opportunity for Facebook to expand its workforce to a broader population of talent. “When you limit hiring to people who either live in a small number of big cities or are willing to move there, that cuts out a lot of people who live in different communities, different backgrounds or may have different perspectives,” Zuckerberg said in the call.

Facebook’s headquarters are in Menlo Park, California in the Silicon Valley, where the median home price is $2.4 million. There are offices in 85 cities across 35 countries. Some of Facebook’s largest US offices are in the largest and most expensive metropolitan areas, including San Francisco Bay, New York City, Los Angeles, Washington DC, and Seattle.

The median staff salary at Facebook in 2018 was $240,000 per year. Zuckerberg has taken a base salary of $1 for the last three years, but collects “other” compensation from the company of $22.6 million, most of which is a security detail for him and his family.

Zuckerberg says the salary adjustments for remote workers based on location is for tax and accounting purposes. The additional motivation to open up employment opportunities at a large, high-paying tech company to a broader population feels like a step in the right direction to combat profound economic inequities, particularly in large cities that feel the distance between high- and low-income workers acutely.

However, it also feels like a convenient cover for cutting worker pay. Workers should be paid for the value and quality of their work, not their cost of living. If Facebook moves forward with this strategy, it will be telling if 1) Facebook actually hires anybody from the communities they claim to expanding their search to and 2) if those workers are hired at a reduced salary according to cost-of-living, thereby inherently devaluing the very diversity that Facebook claims it seeks.

Do better, Zuck.

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