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Oppose Efforts to Pass the Marketplace Fairness Act
lostincoins
Posts: 4,278 ✭
I know this is an e bay link but this affects anyone who sells online not just on ebay and just wanted to bring it to the front of peoples minds again.
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<< <i>It will affect very few sellers. >>
How does
<< <i>If this bill is allowed to become law, it would require many online sellers to collect
sales taxes nationwide from the more than 9,600 tax jurisdictions. >>
not affect every eBay seller, auction houses like TT, Heritage, and thousands of other
businesses that sell items from one state to a buyer in another?
While the Act affects on-line sellers with $1M plus in annual sales, it is probably just a matter of time before all sellers get caught up in the madness.
No Way Out: Stimulus and Money Printing Are the Only Path Left
in a state. When Amazon and Dell agreed to go along it became just a matter of time.
EBay doesn't like it, of course, but they will not be able to stop it.
This will allow WalMart, Target, etc., to really ramp up their online businesses.
As far as our industry, we are in an extremely unique position. Throughout the country we have diverse sales tax rules ranging from none at all to full on sales tax and everything in between. If a law like this somehow gets passed, there will be a huge mess in our industry that would take some time to clean up. Hopefully, we can continue our efforts to encourage law makers to create reasonable sales-tax requirements in each state so that when a mess like this happens, we are uniformly protected. ICTA is working with other industry groups including the PNG, CERT (and their lobbyist) and the Gold and Silver PAC to accomplish these goals on a state level. We are also working with other, much bigger industries, to make sure the sales tax laws on the national level remain reasonable.
As a disclaimer, I am a board member of ICTA and am an active supporter. Our hosts are major supporters of ICTA with Don Willis being a board member. I would hope any dealers on here who are not supporters of ICTA should give them a call and join.
First, let me start by saying that the concept makes perfect sense. On the surface, it seems patently unfair that a bicycle shop in the local shopping center must charge sales tax while a consumer can buy the same bike online without paying the sale tax. This, of course, is the main argument for the proponents of the bill, and would theoretically add a lot of tax revenue to state coffers.
However, the argument has a major flaw in my opinion. The problem is not in "reporting". There are already scores of companies out there ready to pounce on internet dealers like myself with great reporting software to give me the ability to charge and remit tax receipts to the 9300 national jurisdictions.
The flaw is "auditing", pure and simple. If a jurisdiction can assess taxes they have the implied power to audit your books to make sure you are in compliance. Ok, fair enough you say. But imagine a company like ours of 15 people and one full time accountant having to answer to a myriad of tax jurisdictions, essentially without end. Not only that, most of the states treat you as guilty before innocent.
If you need a real-world example one only needs to look at the state of California. For years, the Long Beach Show was robust and national with dealers like ourselves coming from far and wide. In the late 1990's California decided they needed more tax revenue and started randomly assessing dealer at LB with fines (corporate income tax and personal state income tax for the company owners). I heard of dealers being assessed over $50,000 simply based on estimated revenues that where a clerk in Calif made an educated guess. Nevermind that a majority of sales at a show like LB are dealer-to-dealer. It is up to the company to fight the assessment, not the other way around. This (again my opinion) is the main reason for the decline of the Long Beach show.
So... without being too long winded about this... and without being too industry specific (because there are many reasons why rare coins shouldn't be taxed like other consumer products)...be careful what you wish for here. I think if the MFA passes, you'll see a HUGE decline in small mail order businesses around the country and most of the sales will move towards the already huge companies like Amazon, Wal-Mart, etc. They are the main proponents of this act, as it is in their best interests.
Generally I am a liberal voter, etc but the MFA is one place where I stand behind the Tea Party (ironic if you know me) because the general view from their side, is the MFA is simply another national sales tax. And it is. The only way it can ever be properly implemented is through a VAT, like they have in Europe or Canada.
...and if anyone here is a student of the European and Canadian coin hobbies, you well know that the VAT is a collectibles-marketplace killer.
Just my 2-cents.
<< <i>This is a fair proposal that levels the playing field for sellers with physical stores
in a state. When Amazon and Dell agreed to go along it became just a matter of time. >>
All major retailers support this idea because it adds cost to their on-line competition. While the proposal only affects "large" volume on-line sellers do not believe for a minute it will end there.
<< <i>EBay doesn't like it, of course, but they will not be able to stop it. >>
Ebay doesn't like it because it may cost them their large sellers who become subject to the new requirement. Keep in mind the burden and expense of compliance falls on the seller, not ebay. Ebay will have to make some adjustments to give sellers the software support needed.
<< <i>This will allow WalMart, Target, etc., to really ramp up their online businesses. >>
While it is fair to require buyers to pay a sales tax that they have previously been withholding from their state is it fair to require on-line sellers to deal with the massive paperwork nightmare and sending of payments to thousands of possible jurisdictions throughout the country? How long before foreign tax authorities succeed in imposing the same thing on US based international on-line sellers?
Affected sellers will also become auditable to each of the jurisdictions (thousands when you consider state AND local city/county sales tax) forcing them to keep expensive, impeccable records. Retail stores only have to deal with their respective state and local taxes when it comes to these issues. Another case of a public agency requiring a private agency do its work at the expense of the private agency.
What we will see is the enforcement of one state's laws across state lines. This is a battle for state's rights advocates as well.
No Way Out: Stimulus and Money Printing Are the Only Path Left
<< <i>I believe that the Marketplace Fairness Act is a horrible idea, for the coin business... AND small businesses in general in this country. >>
Bravo Zulu
I agree, as well.
<< <i>This is a fair proposal that levels the playing field for sellers with physical stores
in a state. When Amazon and Dell agreed to go along it became just a matter of time.
EBay doesn't like it, of course, but they will not be able to stop it.
This will allow WalMart, Target, etc., to really ramp up their online businesses. >>
Yeah, like WalMart, Target, Amazon, and others need any more help.
These guys support it because it gives them a marketplace advantage, not because they believe in "fairness." Bills like this will ensure the big will get bigger.
This is a killer for small businesses in general, and for coin businesses in particular, as almost every state has different rules for taxing coins and bullion. With the low margins on coin sales, most dealers in this country have to cross the $1M threshold just to stay in business.
``https://ebay.us/m/KxolR5
In other words that sale is still taking sale in that state! Internet or not!
RAD#306
<< <i>I dont think this will effect those that sell in a "TAX free" sales tax state
In other words that sale is still taking sale in that state! Internet or not! >>
Got it back asswards coinflip. It matters only where the buyer resides. The seller will be required to tax the buyer according to the tax regulations of the buyer's location.
"Everything is on its way to somewhere. Everything." - George Malley, Phenomenon
http://www.american-legacy-coins.com
1) this will be a burden on smaller online retailers;
2) the need to calculate sales taxes may drive online
merchants to them as host, since they will already have
the process worked out.