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Treasured Social Butterfly
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Re: Tens Of Thousands Of Small Online Businesses

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To be clear, the law has always said that the purchaser must pay the sales tax. This ruling puts the task on the online vendor so the customer can no longer evade the tax by not declaring. 

 

The South Dakota law exempt small internet sellers but there are already internet based companies who can calculate and file a vendor's sales tax obligations for very little cost. 

 

In short, this will not put any online vendors out of business unless their business model depended upon being effectively exempt from state sales taxes to compete. 

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Valued Social Butterfly
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Re: Tens Of Thousands Of Small Online Businesses

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this ruling will also drive up costs to people / customers.   

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Tens Of Thousands Of Small Online Businesses

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https://seekingalpha.com/article/4183560-supreme-court-potentially-bankrupt-tens-thousands-small-onl...

 

 
 
Did The Supreme Court Potentially Bankrupt Tens Of Thousands Of Small Online Businesses?

 

The Supreme Court just ruled that states can force online companies to pay sales taxes whether or not they have a physical presence in the state.

 

This will require small businesses, thousands of which are barely breaking even, to pay what for them will be huge sums in compliance costs. Tens of thousands could go under.

 

The looming global trade war is bad enough, but the Court's decision could spell the end of the economy's recovery.

 

In SOUTH DAKOTA v. WAYFAIR, INC., ET AL., the Supreme Court ruled today that states can force online businesses to pay sales taxes whether or not they have "nexus," which, roughly speaking, means having a physical presence in the state.

 

I have a small online business, www.economicsecurityplanning.com, which sells personal financial planning software. During our 25 years in business, I've lived in fear of today's decision. We have employees and, thus nexus, in 6 states. Each time we hired someone in a state, we immediately registered to pay sales taxes.

 

But doing so required further tasking our sales-tax processing company at, for us, a very high price, to process yet an additional state's sales tax payments. It also led, as I discovered to my horror, to our needing to file a corporate tax or gross receipts tax return in each of the 6 states, annual reports in several of the 6 states, reports in several states about workers compensation and unemployment insurance and a variety of "small" fees. The compliance cost of hiring the sales-tax processing company, paying our accountant and responding to the weekly and sometimes daily letters about filing this form or that is already costing my company $50,000 a year.

 

$50,000 a year is a huge sum for a small company, especially one like mine that is investing every penny it earns to grow and just breaking even. Based on the Supreme Court decision, my company's tax compliance bill as opposed to tax bill could easily come to $150,000 if, as I suspect, states will be emboldened by this ruling and apply what they call "economic nexus" and levy corporate income or gross receipts taxes to any company selling any products to any entity in their states.

 

 

We enjoyed the Internet boom, is this ruling the Internet bust?

 

Like the article said, a trade war AND this,  ouch, maybe ouched to death for many small businesses.

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