Our elected officials stand before each other and give their reasons why or why not to impose the internet sales tax. It is easy to tell from the spirit of the speech that few of them have spoken to their constituents about what they would like to see happen. There are speeches that are “pro” and those that are “con.”
Those who want to impose the tax speak loftily about how unfair it would be to the brick and motar businesses located on today’s Main Streets. They already have to pay overhead for their building, electricity, phone, advertising, and for their employees. They will soon have to pay for medical coverage if they employ more than 20 people on a regular basis. They already are forced by their suppliers to purchase a designated number of items in order to be able to place an order with them. These people already have to make weekly payroll and pay out the taxes that go with it. They also have to file monthly sales tax reports with their state jurisdiction. Some retailers have to pay a local sales tax, too. These things are all part of doing business in a place where customers can come in at will and view products to purchase. The speaker declares that it is difficult on these retailers. Well, no one ever said that business is easy.
The “pro” tax arguments usually begin with the statement that online sales companies operate with no or minimal overhead. Some speakers base their arguments on traditional retailers already having to pay sales tax on their traditional sales. These speakers want online retailers to have to pay sales tax, too. They consider it only fair. A small problem with this theory is that it will mean extra work for traditional retailers. If the bill is passed, the traditional retailer will have twice the work at the end of the month. They will have to charge sales tax for their online sales, too. Yes, they sell online, too. Maybe they don’t advertise it but they do it so that they have a chance to get the customers that don’t shop in the traditional manner. Of course, implementing the bill will be confusing and the confusion will double or triple the end of month paperwork. There will probably be a new department receiving the online sales tax. This will likely mean that the retailer will have to use more than one program for computing the taxes and file to more than one address. There will be more than one folder in the filing cabinet and more than one chance of making costly mistakes that can result in fines. Those who vote “pro” want the online retailer to pay sales tax because “it is only fair” but those who speak in favor of it fail to mention how unfair it will be to the traditional retailer because it will double, triple, quadruple that person’s monthly reports. These speakers are also saying their “piece” for the large retailers like Walmart, Amazon and other companies who have a large online presence already and also already have the software in place for filing to multiple jurisdictions. These retailers welcome the online sales tax because it will drive the smaller retailers out of business. So much for fairness.
The “con” side is introduced when an adventurous speaker steps up to actually speak for the constituency he/she represents. The small business person who sells solely online will be heavily impacted by a sales tax for online sales. He or she already operates on a slim margin in order to compete with large retailers and having to pay out sales tax for each sale will cut into it deeply. It isn’t just the margin that will be affected. The sales taxes will have to be computed for multiple jurisdictions. What does this mean for the person operating from his/her garage or bedroom? It means knowing the tax rates for each place in the United States where he/she “might” sell an item and being prepared to charge sales tax on that item. At the end of the month the taxes must be computed for each sale and the form for each jurisdiction must be completed and filed. There will be thousands of possibilities that will have to be considered. This will put an undue burden on the small retailer who is just trying to supplement his/her income with internet sales. Can you really imagine your local makeup lady coming home at the end of the month and trying to figure out the sales taxes for jursidictions in California, New York, Maine and Florida all in one month? The online sales boost her monthly line just enough to get her a good discount. The discount will be cut by the sales tax. In whose world would this be “fair.”
Harry Reid (D, Nevada) stated in his speech that it would not be a problem for the small seller to file his/her sales taxes monthly because “the government will provide the necessary software for them to use.” No one has ever seen a “user friendly” software and this one will be no exception. The stack of tax fliers will probably be nearly as tall as the ceiling in the room the retailer uses.
If those voting to implement this online sales tax take into consideration the feelilngs of their constituents they will vote against it. The C-Span Facebook page is covered with comments from those who are against it all over the U.S. If they read the tweets on the subject they will be certain that the people for whom they work do not want it implemented. I voiced my opinion on Facebook myself. Guess how I voted.