Internet Sales Tax Winners and Losers

Last week, the National Bureau of Economic Research released a report that identifies the real winners of a new online sales tax regime. To the surprise of no one, the study found that small businesses struggling on MainStreet should not expect the taxman to be their savior.

Everyone likes and roots for small entrepreneurs. We know the people in our community who run local retail and we respect what they do. Their efforts are felt and admired on a daily basis. That is why the generic idea of supporting Main Street is so powerful.

But, in the case of online taxation, we now have proof that Main Street won’t see a boost in sales if the Marketplace Fairness Act (MFA) is passed. Read more

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Spring 2014 iAWFUL List – Consumers in the Crosshairs

Twice a year, the team releases an updated iAWFUL list. The list provides a concise collection of both active and proposed legislation that would present a significant non-market barrier to Internet commerce.

This year’s list is full of legislative efforts run amok. As legislators and regulators fall over themselves in a race to regulate Internet services, many are doing more harm than good. In many cases unfamiliarity with technology or misinformation is driving action.

Data breaches and privacy concerns have whipped elected officials into action, but as the 2014 iAWFUL list finds, elected officials are making things worse. Read more

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Changing the Conversation about Fairness in Internet Taxation

Earlier today we had the opportunity to present members of Congress with a workable alternative to the unfair and unconstitutional Internet sales tax measure that was rammed through the Senate last year. Other witnesses were given the same opportunity, so it’s a shame they didn’t make the most of it.

Last year, the House Judiciary Committee, led by Chairman Goodlatte, took on the daunting challenge of trying to repair the Marketplace Fairness Act (MFA), a broken bill that emerged from the broken process of the US Senate, who failed to hold a single hearing and then blocked all floor amendments.

The House Judiciary committee’s first response to this challenge was to publish principles to guide any effort to overturn today’s standard, where every business must pay sales tax for any state where it has a physical presence.    The good news is that these principles were sensible, smart and workable. The bad news is that the bill passed by the Senate violated every single one of them. Read more


Cyber Monday Success Argues Against Radical New Internet Tax

Cyber Monday 2013 was an unprecedented success for everyone involved  – including state tax collectors.  So why are we still arguing about new Internet tax schemes?

According to most estimates, Cyber Monday sales were up nearly 20 percent from 2012, a jump made even more impressive by the otherwise plodding pace of our economic recovery.

For consumers, Cyber Monday was an opportunity to get great deals, away from the massive – and sometimes dangerous crowds at the stores on Black Friday. For online retailers, it was the biggest sales day of the year.  And for tax collectors, Cyber Monday was a massive infusion of cash. Read more


New Report Proves “Free” Internet Sales Tax Software Is Still Going to Cost Businesses

As the issue of Internet sales tax heats up in Congress, there has been much speculation about the costs that online and catalog retailers will face in integrating so-called “free” software under the Marketplace Fairness Act.

The notion that free software, from providers like Avalara and others, will keep costs low for businesses is untrue and ignores the significant costs of integrating and running “free” software. Read more

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A Small Business Stands Up Against the Crushing Blow of new Internet Taxes

I came across an op-ed the other day in The Hartford Courant, Online Tax Fairness Act Will Hurt Small Businesses.  And much to my surprise, the author, Terri Alpert, was not a tax accountant, or an advocate, but a small business owner who sees how the Marketplace Fairness Act (MFA) may be the thing that pushes her business over the cliff.

So concerned about the MFA’s harms, she took time away from selling her items and growing her business to write this op-ed.

Terri founded her catalog and online brands to advertise unique items that you just can’t find in a big box store.  So far she’s seen success with mail-order and online sales.

But if the MFA is passed, she knows the problems that come with it:

  1. Makes ordering by mail and calculating the required tax so difficult customers will stop buying — disenfranchising senior citizens who do the most shopping by mail.
  2. Squeezes out unique sellers and the “little guys” as the cost of becoming a remote sales tax collector for some 10,000 different jurisdictions makes it impossible for them to operate.
  3. Staves off innovation that local businesses need now more than ever. Read more