Sales Taxes Bill

[lesliekirk]

Re: Sales Taxes Bill

They need to go to a VAT, with a percentage divided between state and federal. Then abolish the income tax, or drastically lower it.

FairTax

[kayakbabe]

Re: Sales Taxes Bill

I have firsthand experience of the look local and shop online. Lol. People do. But not that many. Least I don't think so.
I was in pottery barn outlet and standing near two ladies looking at a watermelon knife. One suggested buying it. The other looked it up online and said "you can get it cheaper at the watermelon shop, don't buy it here" :-) that is one of my stores. Also it's both brick and mortar and online. Our online price for those knives is different than in the store. Because we don't have the fancy packaging for online sales. They can in person to my brick and mortar store and we mad because it was 1$ more than our online price. (even though they wouldnt have to pay shipping. And it was still cheaper than the pottery barn price) They took home the one without the pretty gift wrap at the online price. And they come back in person three or four times a year ( they live an hour away).

People do comparison shop. But i beleive shopping experience is even more important. Repeat buyers are much cheaper to obtain if they had a good time. That's why having a niche is important online. So it's easier to find you instead of a competitor and so they'll remember you if they saw you before. Now I will say the watermelonshop hasn't gotten the attention it deserves from me for its online presence. It's kind of a hobby site and way due for a makeover.

[Bruce - PhosphorMedia]

Re: Sales Taxes Bill

They need to go to a VAT, with a percentage divided between state and federal. Then abolish the income tax, or drastically lower it.

Bill, I see you haven't done many Canadian sites<g>...VATs are never as simple as they sound. In fact, when used to suplant income based taxes, they make our haphazard local state taxes look downright brilliant<g>

[nottheusual1]

Re: Sales Taxes Bill

While enforcing sales tax rules in the Ecommerce world will generate big revenue for states, I don't think it will cause some new halcyon days for local retail.

Plus, I buy from the local big boxes on line and go pick it up all the time - sure is handy, but even when they ship it to me, I'm still paying sales tax since they've got a local presence. I just see a win for the cash-strapped states - especially the places with high sales tax. Retail will figure itself out - and now the "it's cheaper online" won't refer to because of sales tax.

Even playing fields are good. Compete on your merits, not manufactured advantages.

[Bruce - PhosphorMedia]

Re: Sales Taxes Bill

While enforcing sales tax rules in the Ecommerce world will generate big revenue for states, I don't think it will cause some new halcyon days for local retail.

Plus, I buy from the local big boxes on line and go pick it up all the time - sure is handy, but even when they ship it to me, I'm still paying sales tax since they've got a local presence. I just see a win for the cash-strapped states - especially the places with high sales tax. Retail will figure itself out - and now the "it's cheaper online" won't refer to because of sales tax.

Even playing fields are good. Compete on your merits, not manufactured advantages.

Like a lot of things with the government (and the American population) too much of our precedents and SOP is based on a world that is 200+ years old. Forget the 'Global Economy', we haven't even dealt correctly IMO with the concept of a NATIONAL economy.

[wajake41]

Re: Sales Taxes Bill

Sales tax law passes the Senate today. Bill contains 46 different taxing jurisdictions. Each taxing jurisdiction must provide software (what ever than entails, calculation, accounting, whatever?) to online retailers. Will Miva be able to integrate these various software interfaces into it's checkout? Sounds like a challenge!!
Larry

[Rick Wilson]

Re: Sales Taxes Bill

We're not sure (at this point) if we're going to directly do anything. There are 4 (and probably more coming) add on services that do this already for Miva Merchant and the bill AFAIK exempts stores doing less than $1 million annually online.

That means 80% of our customers will not be impacted and the remaining 20% have available and affordable solutions.

If we do choose to offer it, it would likely be at an additional cost.

[wajake41]

Re: Sales Taxes Bill

Can you imagine trying to accomodate 46 different software solutions to sales tax accounting. Sounds like a business opportunity for someone.
Larry

[Rick Wilson]

Re: Sales Taxes Bill

There's a number of services right now that manage it for all 11,000 or so that exist all around the US, but yeah I'm sure it's a chore.

What I expect to see in the market is a few OEM's who solve this well and then come to people like us and offer to Private Label or White Label it. They'll want to charge us some minimum monthly fee and some fee per lookup and want us to mark that up and pass it along to our customers, is my guess.

[wcw]

Re: Sales Taxes Bill

While only the $1M+ stores have to pay, I think every one of us are going to be affected. I remember a few years ago Arizona pulled my domain out of thin air and wanted all the details about my business and my activities including every sale made to an Arizona customer so they could determine if they could tax me. It took me a half day to dig up the info they wanted. If everybody has to do that with 46 different jurisdictions, there will be billions of man hours wasted every year.

[Rick Wilson]

Re: Sales Taxes Bill

Yep I agree. And the $1 mil cap is for now, my guess is they won't be able to help themselves and they'll eliminate that threshold at some point.

[wajake41]

Re: Sales Taxes Bill

If what i heard on Bloomburg about this bill is true, it has a provision that states cannot audit on-line businesses for compliance. Brilliant, pass a law with no enforcement. Hope they do this with the IRS and local speed limit laws too.

[UltimateNourishment]

Re: Sales Taxes Bill

exempts stores doing less than $1 million annually online.

That means 80% of our customers will not be impacted and the remaining 20% have available and affordable solutions.

The past 2 years, my store had over $1 million in gross sales each year, but with my cost of goods my net sales is equal to that of a very very small business (read: 1 employee... me!). Therefore, it would **NOT** be affordable for me (the sole employee) to then have to calculate (how?) and submit sales tax (by hand?) to 46 states, not to mention all the various sales tax counties within the states.

I cannot be the only online store that is a very small store by "net numbers" but have a high gross sales volume????

And also someone mentioned, what if those 80% of stores who do not *think* they'll reach the $1 million annual threshold but then has a banner year, what then? Do they collect sales tax all along? Or do they now owe $80,000 in sales tax to the various Dept of Revenues because they didn't collect because they *thought* they would not meet the criteria?

Any insight from those who have a simple solution would be a relief.....

Please advise?

[Rick Wilson]

Re: Sales Taxes Bill

Julie,

I have a lot of sympathy for you (this is precisely why I sent an email to our whole base urging people to contact their reps about this). It's also worth noting it hasn't passed the House yet, so there's still a chance to stop it.

As for offering it as a feature, there is at least one module/service that currently does it for free to the Merchant and gets a kickback from the states, but I'm not sure if that will stay true if this bill passes.

As for us offering it in the core software, we're watching the market to see what's really needed, if it stands (there's a real chance the Supreme Court would kill it due to potential violations of the Interstate Commerce clause), etc...

Ultimately though if we have to offer a solution for it, it will be carry a cost with it (unless we can get the states to pay for it, for example) as it would have a significant cost to us to offer such a service.

[wcw]

Re: Sales Taxes Bill

If you collect the sales tax but don't reach the $1M, do you have to contact each customer and send them a refund?