Why we oppose internet sales tax.
- There are over 12,000 tax jurisdictions in the country. Forbes magazine estimates the annual cost for small business to collect and distribute these tax dollars would be between $57,500 and $200,000 annually.
- In addition to collecting and submitting tax revenues to all of these districts, small businesses will have to complete monthly or quarterly returns in each district. This means additional time & money to small businesses.
- In addition to the number of tax districts, there are variables that further compound tax revenue calculation: some items & ingredients are tax exempt (varying by jurisdiction) and jurisdictions have tax holidays (varying dates nationwide).
- While proponents of internet tax declare that software is available to help small business with the aforementioned, that is not the case. And when such software is developed, what is the likelihood that it will be affordable for small businesses?
- Many small businesses, in an effort to augment their brick & mortar sales, sell on eBay, etsy, Amazon, and the like. Those of us who use these web sites, give these businesses about 15%-20 of our annual sales. In addition, we are under the thumb of the feedback systems, preferred search systems, and shipping requirements imposed by these corporations. As a result, many small businesses (including us) have and are investing in the creation of our own autonomous web sites in order to fully control our business destiny. Corporations like Amazon (already collecting taxes voluntarily) have a work force that allows them to handle these massive tax requirements. So it’s no surprise that big business supports internet sales—little guys are either going to have to get onboard with ebay or Amazon or go out of business.
- We have no sales tax in New Hampshire. By requiring NH businesses to collect taxes for 12,000 tax jurisdictions across the country, the burden is being shifted from the buyer to the seller, from the taxpayer to the business owner. As taxpayers, we all responsible to report our income to our state government and to remit the amount we owe. How can we fairly make small NH businesses responsible for collection and distribution of the tax revenues for individual residents of other states? And on another note, this will open up the possibility of collecting taxes for other countries (an exponential complication).
- On a more intangible note, many of our brick & mortar customers are from out-of-state. In fact, more than 50% of customers are from outside of New Hampshire. When a customer from California comes to our shop, there is no tax on their purchase. However, when they get home from their vacation and visit our shop online, suddenly our prices go up 10%. So I guess that means we are defining the internet as an entity that exists in the physical location of the person who is viewing a particular online store. But that seems contrary to the view that the internet is everywhere and nowhere.