Small business owners, including those in Washington state, have joined an alliance opposing the Marketplace Fairness Act, a bill that would grant states the authority to require online businesses to collect state sales tax at the time of transaction, no matter where they’re located.
As part of the bill, which exempts businesses under $1 million annual gross receipts, states would first be required to simplify their sales tax laws. Nearly a dozen business owners in Washington are speaking out about the proposed bill, citing a myriad of unfair compliance and auditing costs for small business, since each state could potentially have its own set of sales tax rules.
“There’s nothing fair or simple about this so-called Marketplace Fairness Act and the $1 million dollarthreshold is absurd,” said Peter Ollodart, owner of Puget Sound Instrument, Inc. in Tacoma. “It would require small businesses like mine to spend anywhere between $20,000 to $300,000 in the first year alone, just to meet all the various compliance and auditing requirements.”
“We’re all for collecting a fair sales tax but adhering to the reporting requirements of this bill as it’s currently written would be detrimental,” says Ethan Lynette, a partner with Fairhaven Health, LLC inBellingham. “Imagine a small business having to apply a different set of rules to literally thousands of tax districts or filing hundreds of tax returns each year.”
More than 600 other small business owners from around the country have joined the eMainStreet Alliance to kill the bill, and save their businesses. Thirty members of the alliance, including Ollodart, recently traveled to Washington, D.C. to meet with lawmakers.
“It was a great experience to see other small business owners coming together and walk the halls of Congress for a common cause,” he said. “The members of Congress made it very clear that Home Depot, Wal-Mart, Amazon and other big box retailers are lobbying hard to have this bill pass and they need businesses like ours to come out and make our voices heard.”
The eMainStreet Alliance believes the Marketplace Fairness Act is fundamentally flawed and cannot be fixed through amendments. Small business owners are advocating for any future online sales tax bill to do the following:
- Clearly define one tax rate
- Exempt remote sellers from out-of-state audits
- Ensure that online sellers deal with one state or one taxing authority
- Ensure that the law is simple enough that any business of any size can comply with the requirements without undue burden
Lynette and Ollodart are encouraging other small companies that sell online to join the eMainStreet Alliance, and lobby their U.S. Representatives to explain how the Marketplace Fairness Act would negatively impact their businesses. For more information, please visit www.emainstreet.org. [24×7]
