Small businesses and online sales tax

Illinois Statehouse News

Illinois Statehouse News

An article in the Illinois Statehouse News highlights local retailers’ take on legislation that would require online retailers to collect sales tax:

Smaller, brick-and-mortar stores, however, say the new state law  — and the proposed federal initiative — will make it easier to compete.

“We know it’s a competitive environment. We have to compete to be viable, but we should be on a level playing field with our online sellers,” said Bob Thompson, owner of BikeTek, a bicycle shop in Springfield.

Lamsargis, owner of Springfield Running Center, an athletic apparel and shoe store in Springfield, said he’s had customers come into his store asking him to match prices they found online without the sales tax.

“Even though we give a little bit of a discount to locals, we cannot match the discounts given by the big companies that don’t have the bricks and mortar,” Sargis said.

Some small online retailers are concerned, however, about their ability to collect sales tax:

Brandi Tolley, who runs a men’s apparel eBay store, called the measure a “desperate” way for states to pull in revenue. Her store earns about $35,000 in sales annually, Tolley said.
“A lot of us are small businesses. We don’t have huge brick-and-mortar stores. We’re just tiny businesses trying to make it,” Tolley said.

But the truth is, it’s not difficult for a retailer of any size to collect sales tax online. FedTax.net was founded to provide a solution for retailers, and TaxCloud has been designed to be easy to use for even a single person operating a sole proprietorship.

It’s also important to note that the store owner quoted is an eBay store owner; the same article includes a quote critical of the legislation from an eBay executive. But we find it odd that eBay is so opposed to the Main Street Fairness Act. EBay manages not thousands but millions of live auctions every day, so it’s hard to believe that they really would find collecting sales tax too complicated.

It seems that eBay should be able to offer sales tax collection as a service for its users, just as many shopping cart services do. In fact, TaxCloud has been integrated with several shopping carts, and we’d welcome the opportunity to integrate with eBay, too—it would make collecting sales tax easy for even the smallest eBay store owner.

What do you think?

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s