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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Additional reading
- Coalition fights internet tax that could threaten small business
- Wilson’s guest post on Forbes, “Why I support the Marketplace Fairness Act”
- Podcast: eBay talks about the Coalition
- New coalition formed to oppose e-commerce tax proposals
- Small e-retailers mobilize to lobby against online sales tax
- Marketplace Fairness Act Information
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