Smaller retailers oppose nationwide online sales tax
For smaller online retailers, cutting costs is essential to keep operations going. Since these merchants provide products for consumers all across the country, shipping, processing and other associated expenses can easily and quickly add up. There might be additional costs on the horizon, as several pieces of legislation are making their way through Congress. These bills are proposing that sales tax be implemented by individual states for online retailers, even if they do not have physical locations within those jurisdictions. However, many smaller internet companies are strongly opposed to the potential laws and are asking legislators to consider the increased costs and complications that it could create for the businesses.
Small online retailers form under We R Here
While these regulations would not have any impact on larger internet retailers such as Amazon.com, smaller companies are arguing that the laws would significantly increase expenses for them, as they would be required to collect the taxes. Internet Retailer reports that a coalition of sorts has been formed by these internet merchants. Titled "Web Enabled Retailers Helping Expand Retail Employment," or We R Here for short, the group is lobbying against the bills and stating that any of the sales tax enforcement would limit growth and stifle jobs for these businesses.
"We want to make policy makers know we are here, make sure they are aware of the critical role small web-enabled retailers play in today’s modern economy," said Phil Bond, We R Here's executive director, as quoted by the source. "It is not the job of small businesses to collect taxes for state and local governments where they don't live, don't have a business presence, and don't receive government services."
The organization has received the support of eBay Inc, as the company is comprised of thousands of smaller online retailers. We R Here is proposing that if laws are passed requiring online sales tax to be collected by merchants, then the government should also include a revenue threshold of annual sales that would exclude very small retailers from the regulation, states Internet Retailer.
California sees enforcement of online sales tax
In California, a law recently was enacted that requires internet retailers to collect sales tax from shoppers. The Los Angeles Times reports that the new regulations are expected to bring in approximately $317 million for the state as well as local governments after the first year. The news source notes that before the tax went into effect on Saturday, September 15, many California residents were stocking up on items online to avoid the extra fees.
