SMB’s And The Unfair Marketplace Fairness Act
In 1987, John Beagle started CFR, Inc. dba Rent-A-Computer where he assumed the duties of sales, marketing and operations. In 1997 John registered the domain name “Rentacomputer.com”, which would prove to be a milestone event that would change our marketing focus from regional to national/worldwide. In the year 2000, John changed the name Rent-A-Computer to Rentacomputer.com to reflect a newly found focus on internet advertising and marketing, which exponentially increased the expansion of our business base. John continues to direct Rentacomputer.com’s major sales and marketing efforts as the company’s founder and lead visionary.
Today John is writing about the burden that will soon be placed on small business like his nationwide should the Marketplace Fairness Act become law.
The Marketplace Fairness Act of 2013 authorizes each member state under the Streamlined Sales and Use Tax Agreement (the multistate agreement for the administration and collection of sales and use taxes adopted on November 12, 2002) to require all sellers not qualifying for a small-seller exception (applicable to sellers with annual gross receipts in total U.S. remote sales not exceeding $1 million) to collect and remit sales and use taxes with respect to remote sales under provisions of the Agreement, but only if such Agreement includes minimum simplification requirements relating to the administration of the tax, audits, and streamlined filing. Defines “remote sale” as a sale of goods or services into a state in which the seller would not legally be required to pay, collect, or remit state or local sales and use taxes unless provided by this Act. (Source Wikipedia.org)
Marketplace Fairness Act is Unfair to SMBs by John Beagle
Who will enforce the collection of all these new taxes on small business?
The Marketplace Fairness Act, best known as the Internet Sales Tax would be too burdensome on the small business like mine. Most sales from small internet companies are just a few dollars in lots of different places.
To require sale tax recordkeeping, collection and distribution of sales tax in the thousands of sales and use taxing districts throughout the United States is far too burdensome for all small companies.
It takes hours to complete forms for California alone. How much time is it reasonable to ask the small businessman to spend on collecting taxes? How much business will be lost if there is no economic advantage to doing business with the small businessman?
Many of California’s cities, counties, towns, and communities have special taxing jurisdictions (districts), which impose a transactions (sales) and use tax. These districts increase the tax rate in a particular area by adding the district tax to the combined statewide rate of 7.50%. The rates for these districts range from 0.10% to 1.00% per district. More than one district tax may be in effect in a given location. As a seller or a consumer, you may be required to report and pay district taxes for your taxable sales and purchases. Source: California Board of Equalization
How complex it it to pay sales tax? In California for example there are 6 pages of ‘special tax rates,’ that every penny of every sales has to be accounted for, collected and then individually accounted for when paying. Any mistakes will be penalized.
Continued on Critical Politics
If you are feeling sick today it may be ok to go ahead and call of work. Early this month the House of Representatives held a hearing on a bill to make Mandatory sick days a requirement for employers. If the bill (that will be voted on this spring) passes offering paid sick leave will no longer be an option.