Internet Sales Taxes: a headache for small business owners
Small business owner Justin Krauss explains how the National Internet Sales Tax Mandate burdens small businesses:
Each of this country’s 10,000 different taxing jurisdictions has its own laws for applying sales tax to all sorts of goods — including food, prescription drugs, non-prescription drugs, software, clothes and much more. Plus, within the same zip code, even on the same street, different tax rates can apply. I manually downloaded and printed the sales tax rates by zip code for all of the states. It’s over 38,000 lines long and 811 printed pages.
MFA proponents argue that the “free software” (paid for by the states) will make this complexity irrelevant. But the software will only provide me with rates, not product categories, and it will do nothing to help lift the time-and-money burden of submitting up to 600 tax returns per year. So much for “free.” I can use an unsubsidized software program like the one Avalara produces, which simplifies the process to some , but if I did that I’d have to pay Avalara a fee on every single sale I make, plus about $29 for every tax return I file. For my business, that would be $16,000 in remittance costs annually, plus thousands of dollars in transaction fees.
The problems and costs don’t end there. I scheduled two meetings with Avalara to walk me through implementation of their software. Like many other small businesses, I use the accounting software Sage 50 (formerly Peachtree). The Sage 50 platform isn’t capable of live, forced compliance, so the Avalara representatives I spoke with told me I’d have to upgrade to the Sage 100 platform in order to automate my sales tax calculations. They also said my cart isn’t compatible with their program and would have to be modified. Moreover, I’d have to change my entire sales software and strategy because no multi-channel cart solutions are currently supported by their software. To integrate Avalara’s software, I’d have to spend at least $40,000 in the first year alone, and then a certain amount each year after that.
Campaign for Liberty will continue to lead the fight against any type of Internet Sales Taxes.