There are two huge falsehoods being spread about this bill. The first misconception is that this bill is beneficial to small businesses and the second is that this bill will cost small businesses almost nothing to implement.
Grand Junction, CO (PRWEB) May 22, 2013
Garage Flooring LLC, a small business selling garage flooring and storage is joining a growing chorus of small businesses – including Scrapbook.com, OnlineStores.com and others companies across the country who are taking issue with recent legislation that passed the Senate and is now in the Judiciary Committee, with Rep. Bob Goodlatte at the House of Representatives.
The so-called Marketplace Fairness Act has been touted by Walmart, Home Depot and other mega retailers as a bill to help small businesses. According to Justin Krauss, Co-Founder and President of Garage Flooring LLC it actually does the opposite of what it claims. “This bill would force over 20,000 small and medium sized businesses across the country to collect sales tax for all 46 states. It would also expose us to a barrage of audits from states where we have no physical presence, voting rights or political representation. It will put many of us out of business.”
Krauss says that the bill has been misrepresented by big business and senators alike. “There are two huge falsehoods being spread about this bill. The first misconception is that this bill is beneficial to small businesses and the second is that this bill will cost small businesses almost nothing to implement. They are both completely inaccurate.” Walmart and other supporters claim that the bill will be good for small businesses because it will allow mom-and-pops to compete with other small businesses online. Krauss refutes this. “When was the last time Walmart did anything to help mom-and-pop businesses? This bill is designed to cripple small businesses like mine and bury us under a mountain of tax compliance and remittance costs. We pose a threat to Walmart, just like all other small businesses because the internet is the last place where we can actually compete on a level playing field with big box retailers and they don’t like it.”
Supporters also claim that a ‘free software’ will be provided by the states which will eliminate the cost of collecting the taxes. Kevin Hickey of OnlineStores.com says this too is totally false. “The notion that we can simply download a free software and wave a magic wand is absurd. If the cost of compliance is virtually nothing, why does Walmart employ and army of tax attorneys and accountants to sort through tax laws and to deal with compliance. We estimate that our compliance and remittance costs in the first year alone will be over $40,000 dollars. And it gets worse from there.”
Small businesses who sell items online will have to incur additional costs on top of any integration fees as well. “Those of us who sell online will not only have to integrate new sales tax software with our websites, we’ll also have to upgrade to more expensive accounting systems, train our staff on the sales tax laws of all 50 states, submit monthly sales tax returns to 46 states, deal with a mountain of accounting issues such as sales tax exemptions forms, sales tax holidays, tax audits and more!” says Krauss.
Hickey says there’s another massive costs buried in this bill. “Many of us will have to classify products into thousands of different tax categories and face retribution for states if we accidentally mix things up. In Wisconsin, for example, US Flags and WI State flags are usually tax free while other flags are subject to sales tax. That same flag bundled with a flag pole changes the rules. It’s different in every state.” Every state has their own laws, product exemptions, and quirks and there’s no central database of products to know how we should classify them. In order for online businesses to code their products to comply with the regulations, they will need to know all the regulations from all the states. The Marketplace Fairness Act does nothing to address these issues and is remarkably vague. “To say that compliance will be burdensome to small businesses is a gross understatement,” says Hickey. Krauss and Hickey both estimate the cost of compliance will wipe out the slim profits they make in the competitive online market selling their products.
“We need members of the House of Representatives like Rep Dale Issa, Bob Goodlatte and others to stand with small businesses and protect us from Walmart,” says Krauss. “We are truly main street businesses and we need their help.”
For more information follow @eunfairness on Twitter.
About Garage Flooring LLC
Garage Flooring LLC is a leading online distributor of Garage Flooring and Storage. Garage Flooring LLC started in Krauss’ home just two years ago. Today Garage Flooring LLC’s sales exceed the threshold proposed by the Marketplace Fairness Act while still falling well under the Small Business Administration’s definition of a Small Business.
About Online Stores, Inc.
Online Stores (http://www.onlinestores.com) is an ecommerce company based in New Stanton, Pennsylvania. The company was founded in 2002 and operates five stores. The company is privately owned and employs 80 people.