Most Read
    Image 01 Image 02 Image 03

    Internet sales tax “will put me out of business” (Update — Maybe not)

    Internet sales tax “will put me out of business” (Update — Maybe not)

    That’s the point — Stop the Internet Sales Tax

    The freewheeling, somewhat tax-free, internet business community consists not only of big businesses like, but also of innovators and small entrepreneurs who create self-employment, supplement incomes, and sometimes just have fun doing what they are doing.

    Yesterday Mandy noted that the feds are about to authorize states to tax internet sales, Fight Over Online Sales Tax Bill Heats Up in Senate.  The key point is that states now have difficulty collecting taxes from sellers unless the internet business has a physical presence in the state.  The new law will change that and make mom-and-pop internet sellers tax collectors for the states. doesn’t care since it has the staff and technology to handle the paperwork. This is yet another example of how regulatory burden favors big business.

    (Update — thanks to commenter for tip) The new law apparently would apply only to businesses with sales over $1 million, a point missing from much of the discussion and worry about the law.

    A reader commented in response to Mandy’s post as follows:

    I have a small hobby business. I specialize in painting pet portraits. I do not make a lot of money from this. I do it because I love to paint and love to see how people enjoy seeing their pets in a portrait. It truly brings joy to their life remembering pets that have passed or have a painting of their current pet. I keep my prices low so people can afford an original oil painting of their pet.

    I sell most of my paintings thru the internet. This will put me out of business. I do not sell many per year and the increased burden of learning all the tax regulations for all 50 states and local municipalities is just not worth continuing….

    If this tax goes through I will not be able to continue. This is a hobby business! I work full time. If this legislation passes and I need to add the burden of collecting taxes country wide, not to mention exposing myself to every tax jurisdiction in the country, just for an additional $1200.00 it truly is not worth the effort.

    There will many people in my position who just will have to close up their business because of the increased burdens our government keeps piling on us. That’s the world we are being forced to accept.

    (added) As noted above, that commenter’s fears may not be realized, but the new law still will stifle competition and will benefit local retailers and the largest internet retailers over the competition. $1 million in sales might mean a small profit margin, so the burden still is great.

    Click the link in the Tweet above and it takes you to a screen where you can find the number to call very easily:

    Heritage Action Call Alert Internet Sales Tax


    Donations tax deductible
    to the full extent allowed by law.



    Voluble | April 24, 2013 at 5:21 pm

    Just as a benchmark, I ran a very successful business with a gross of $10 million a year in sales. Out of that I netted about $60k a year. If my business had been through the internet it is quite likely that the costs of compliance would have made it not worth my time to start or grow such a business. I had as many as 34 employees on my payroll at one time and provided literally hundreds of people jobs at one time or another. That is a lot to forgo in order to get a few more bucks for the government to buy votes with.

    The reason Europe is so stagnant is that they are eaten up with these sorts of barriers to entry. There just aren’t a lot of small businesses there and there is not a lot of innovation as a result. But the big corporations love this sort of thing.

      Sanddog in reply to Voluble. | April 24, 2013 at 6:26 pm

      It’s not surprising that a politician would believe that $1,000,000 in gross revenue makes a business owner a millionaire.

      Successfully operating a small business ought to be a criteria for anyone who wants to pass laws telling us how we can and should operate.

    ThomasD | April 24, 2013 at 5:53 pm

    It’s not ‘tradition’ it is Constitution, law, and SCOTUS ruling. Allowing one State to force a private resident of another State to do their bidding is an affront to the entire notion of sovereign States.

    Economic rights are human rights and this is truly a camel’s nose under the tent moment.

    Henry Hawkins | April 25, 2013 at 10:59 am

    They’ll collect sales taxes from the seller because it is virtually impossible to tax the individual buyers.

    Wait until they force banks and credit card issuers to collect and remit taxes on online merchandise bought via credit or debit card, as almost all of it is. I’m guessing they’d try that next, if ordering the seller to collect taxes proves unenforceable or too expensive to enforce.

    Geez, pretty soon they’ll be taxing the rain. Oh yeah…

    Leave a Comment

    Leave a Reply

    You must be logged in to post a comment.

    Notify me of followup comments via e-mail (or subscribe without commenting.)

    Font Resize
    Contrast Mode
    Send this to a friend