Small sellers: What does $1 million in sales look like?

There has been a lot of talk lately about the “small seller exception” in the Marketplace Fairness Act, which was introduced last month. The bill says that small sellers don’t have to collect sales tax on online purchases, and it defines “small seller” as a merchant with less than $1 million in annual remote sales.

Some opponents say this threshold is still too low, though—that a seller with $1 million in annual remote sales is too small to handle sales tax.

So, what does a seller making $1 million in remote sales look like? Here a few examples.

Bottled Water

You wold have to sell 166,000 cases of water per yearLet’s say an online retailer is selling 0.5-liter bottles of water in cases of 24. At $6 per case, $1 million is equal to 166,667 cases of bottled water, enough to fill 125 fifty-three-foot tractor-trailer trucks.* That means that if you were selling $1 million worth of bottled water in a year to out-of-state buyers, then you would shipping out an entire truck of full of bottled water approximately every three days.

125 trucks

Shoes

ShoesAssuming the average price of shoes is $50 per pair, $1 million is equal to 20,000 pairs of shoes. To make $1 million selling shoes in one year to out-of-state buyers, you’d need to sell about 55 pairs of shoes per day, every day, for an entire year.55 Pairs of Shoes sold each day

Digital Goods

Angry Birds Star Wars AppMany apps go for about $1 each, so to earn $1 million selling apps, you need to sell at least 1 million apps. To sell 1 million apps in a single year, you’d have to sell 2,739 per day to out-of-state buyers, or slightly less than 2 per minute, every minute, for an entire year.

Conclusion

Any business selling at these volumes must be using some sort of e-commerce platform or order management system, and these systems can be easily updated to provide access to free sales tax management services.


truck*A 53-foot tractor-trailer has approximately 4,000 cubic feet of carrying capacity, with a maximum cargo weight of approximately 50,000 pounds.

2 Responses to Small sellers: What does $1 million in sales look like?

  1. You obviously do not run a business. I can put arguments towards each one of your “conclusions”, but I am sure those will not be posted.

    • FedTax says:

      Yes, we do run a business (and have run several previously). Do you run a business? If so, I doubt your business model relies upon ignoring state and local laws.

      There is no reason to suspect we will censor your posts (many other sites call that “moderating”) – if you read some of other posts you will see we allow all coments (except spammers).

      if you have arguments, bring ‘em! We look forward to engaging with you on in this important national dialog.

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