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Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). She is a member of the Online News Association (Sep 2005 - present) and Investigative Reporters and Editors (Mar 2006 - present). Follow her on Twitter at @ecommercebytes and send news tips to ina@ecommercebytes.com. See disclosure at EcommerceBytes.com/disclosure/.
I operate my e-com business by myself, and there’s no way that I would be able to handle the collection and filing for 50 states, let alone knowing the intricacies of the tax laws. No software would change that – and even if it could, the compliance costs for using it (and constant upgrade costs) would eat up half of my profits.
The obvious answer would be to require the venue to collect and remit taxes. Most sites already handle the payments and distribute to the sellers, so it’s no extra issue for them. They also have the staff (and lobbyists) to look after their interests. But to leave it to small entrepreneurs like myself – “crushing burden” does not express it adequately.
I already file sales tax returns in several states because I sell there on one or two weekends a year. States with destination-based sales taxes are particularly difficult. Sellers located in Washington State must break down eBay sales by location and report each taxing district rate separately, a time-consuming process, even if sales are captured in a relational database like SixBit based on Microsoft SQL Server. Because eBay has only one sales tax rate, Buyers are either overcharged or undercharged. I haven’t seen anything to suggest that sellers would be exempt from paying county, city or Regional Transit Authority (RTA) taxes allowing a statewide flat rate.
Not sure what it is like in your state but based on the lack of adequate staff in my state – I find it laughable that a state would think they are capable of going after the millions of mom and pop internet sellers to collect said sales taxes. Let them send me the bill and I’ll deal with it then – till that happens I’m not worrying about it. States are desperate for funds to support all their illegal crimes against taxpayers – this is just the latest scam.
Exactly as @whatever1234 states: If any tax jurisdictions want their money, and have the time and staff to determine what is owed, they can issue a payment request at their expense. And we will go from there.
It will NEVER be cost-effective for ANYONE to administer a program such as this- there would be way, way too much bureaucratic red tape for very little in return!!
As the main job of the Supreme Court is to uphold the United States Constitution, it (the Constitution) states that taxes cannot be collected when goods are shipped from one state to another state. End of story.
And if, by chance, our government does require taxes to be collected and remitted, each state would have to enact a flat tax. No more varying laws and rules for different locations, this would just be way too confusing.
The marketplaces, not their sellers, would be then required to remit the correct amounts to the states. Yes, the same entities which bombard their sellers with their silly rules and excessive fees. Would be very interesting to see the shoe on the other foot!!
I agree with the flat tax.Should that happen. I also think this may be why ebay has raised there store fees in May. To compensate for the sellers, that will fall out should the internet tax pass. I personally think it will pass, because the Government is always chronically broke.As well as every state.
According to Ebay the sky is falling again……How funny.
I agree with the other sellers. It’s tax,tax,tax. For everything. Is China going to fall under this internet tax? They sell on the internet like ebay. All this does is force the little seller out.Money, in general always finds its way back to the government anyway. I think after awhile no one will buy or sell on the internet it will be too expensive. Unless, your one of the big powerhouses like Walmat,Amazon.Etc. I could go on writing pages how this would hurt sellers, but this enough for now.
Don’t let ebay take care of the taxes for us, they will end up charging 10% just like they do for shipping!!!