The Supreme Court's Decision May Kill Small On-line Retailers

The Supreme Court made a recent ruling in favor of states collecting sales tax from sales originating from outside of their own jurisdictions. That's simplifying a lot of gobble-de-gook, but in essence it means that all of my on-line sales, which were sales tax free if they were sold to customers outside of my own state, now require me to collect sales tax. 

This new sales tax directive could be a nightmare. I'd
almost rather have a national sales tax than have to
figure out the various amounts for each state individually. 

My major question is whether I'll have to file sales tax forms for each state that I sell to or not, and how I'm supposed to report those funds. Of course, the other major question is what rate of sales tax I'm supposed to collect? Each state has a different percentage amount, and I'm assuming it needs to be submitted to that state, not my own. This could be SUCH a mess for small businesses. I don't do a lot of mail order any more, but for what I do, this could be a total disaster. 

Amazon is the major reason for the ruling. Although there are
Amazon warehouses in many locations, a few large
warehouses coupled with third-party vendors can cover
a large geographic area. 

In the past, the directive for charging sales tax was a requirement for a physical presence in the state. So if I was sending something to California - one of my major on-line states for sales - I would have to have a warehouse or office or store front in California before I had to collect their sales tax. Now, by this new directive, having a physical presence won't matter any more. I think the whole thing comes down to Amazon and other large on-line retailers who were squeaking through the old loopholes. 

South Dakota is a beautiful state featuring large stretches of open farm
and range land in the east and the Badlands and Black Hills in the west.
It doesn't have a large population, but has a lot of tourists passing
through to see Mount Rushmore and other famous locations. 

The original filer of the lawsuit was the state of South Dakota - a state that doesn't have individual income tax, but relies on other taxes for their budget. Being able to collect sales tax from all sales, not just those made in-state only, opens up a large new revenue stream from all of those people ordering from Amazon on a daily basis. I can see the state's point of view. That's a large amount of possible dollars into their coffers that was floating just out of their reach. 

I'm making this photo a bit larger than usual, hoping you can
see it. The major thing I want you to see is that Amazon was
actually founded in 1995. It really hasn't been around for
that long, but it's become a giant in the retail world. 

And the old law was old - put into place more than twenty years ago when e-commerce hadn't really hit its' stride yet and computers weren't carried in everyone's hands, disguised as cell phones. The original law took e-tailers into account if they had a distribution warehouse in that state, but resellers and on-line listers such as Amazon's third-party vendors weren't really covered by it. A second black hole where state revenue could disappear. 

I run a small business. My on-line sales, although present, are
a very small percentage of my general sales. Still, I have some
very good customers who live in California, Texas, Arizona
and other states, and who order from me regularly. I might
be drowning in paperwork - enough of it to justify looking
very carefully at whether I want to continue an on-line
presence or now. 

So I understand the rationale and the reasoning. I understand the desperation to share in some of the huge sales numbers generated by on-line sales. For small, tiny, on-line vendors such as myself, it's one more reason to look carefully at my sales numbers and figure out whether the extra labor and reporting requirements will justify the amount of on-line sales that I make. 

Here's a Virtual Happy Birthday cake for my good friend, Aearwen.
No calories, no food issues, just something that looks wonderful
and very chocolate. Yum! Happy Birthday, Aearwen! 

On that note, I think it's time to get away from the negativity and concentrate on the pool instead. It was raining hard when I woke up, but there might be a small window between 5 and 6 am where the outdoor pool will be open. I think I'll play it safe and stay indoors today, though, claiming my lane. If the outdoor pool closes, the indoor pool will suddenly become very crowded. Have an excellent Tuesday, and a big SHOUT OUT to my friend Aearwen on her birthday today! Sending long distance *hugs* her direction.