One of the advantages that many online-only retailers have over brick-and-mortar stores is that they can avoid taxes in many circumstances. This translates into savings for the customer and additional sales for e-commerce merchants. 

However, the Marketplace Fairness Act may change this by taxing sales even when a retailer lacks a physical presence. If implemented, this could have a considerable impact on direct-to-customer sales. 

According to a recent study from the True Simplification of Taxation (TRuST) coalition, integrating the new fees into pre-existing operations could cost some businesses $80,000 to $290,000 for the initial change. This would only be for companies earning between $5 million to $50 million in annual sales, with larger enterprises potentially paying more. 

However, Multichannel Merchant published a rebuttal to TRuST's study. Ernie Schell, director of Marketing Systems Analysis, told the news provider that TRuST's figures were exaggerated. There still would be costs involved with the regulation, but Schell believes they would be half of what TRuST predicted. A $30,000 upgrade is still expensive, but retail industry professionals may have no choice but to accept the change. The act has already passed through the Senate and is currently before the House of Representatives. Because of this potential shift, merchants should ensure that their current retail software will be able to seamlessly manage the new guidelines with minimal cost to their business. 

This entry was posted by Retail Pro on Friday, September 27th, 2013 at 9:35 am .