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The Great Sales Tax Debate (2 of 2)

The Great Sales Tax debate part deux…

  • Small businesses shouldn’t need a lawyer like  for 50 State tax problems.
  • The removal of physical presence is not a bad thing for Sellers
  • Physical presence is no longer a barrier to taxation that large corporates were using to claim exemption from tax
  • The Courts were sick of it and are throwing it out
  • It seemed constitutionally sound with respect to large businesses, it didn’t say it’s the same for small businesses

The States need to Adapt

  • Burdensome taxes, a single Mom operating out of a kitchen table exercise having to file the same amount of tax paperwork as Walmart and it’s a burden and undue as the States can fix it
  • The technology is there to fix it
  • Ability to make Amazon collect tax is there
  • The fact that States are so dysfunctional is there and not willing to
  • They need to adapt with business and the economy not the other way around

Stifling Entrepreneurship

  • Don’t want to start if I have to shell out £100k tax bill as soon as I hit FBA
  • Attack on free-will for Entrepreneurs to start up
  • Most employment comes from small businesses
  • Stifling creativity and innovation through this sales tax
  • Also, this removes a lot of Amazon small sellers as this discourages people joining the FBA world

Weed out some Sellers

  • There could be a cleaning house effect that Amazon aren’t opposed to
  • Consolidation of the market place is what they are doing
  • Looking to lose ones steadily over time but losing loads at once would crater their revenues

Buyers will pay more

  • For products that are Prime.
  • The need to suppress price has gone away for Amazon
  • Eventually all the States will collect Sales Tax
  • Amazon has an interest in selling products that are Tax Free
  • Where do Tax Sensitive Tax Shoppers go now after Wayfair? They go to Amazon

Chinese Sellers

  • Let’s say States go after individual lawyers and Amazon gets it’s slate cleaned
  • States push out all the domestic sellers and leaves the Chinese Sellers left
  • By the time a sales tax assessment comes through the Chinese Seller will have cleared their stock and moved on
  • UK VAT is complicated and open season currently
  • Australia immediately patched their laws to tax Amazon sales when they came in
  • If Amazon doesn’t have the resources to find the duplicate accounts and Sellers then how will the States do it?

Amnesty a Year Ago

  • 20 States got together and falsely accused all Sellers on Amazon
  • But if you came forward and signed up they would waive your back-tax on Sales
  • This was a one-time gift that the States give
  • But you are also being falsely accused of something you didn’t do
  • Likely illegal as unfair tax enforcement
  • Aiming to get Sellers to register going forwards
  • Wisconsin is going after Walmart – saying Walmart is a Retailer (but not saying Amazon is)
  • The Wayfair case isn’t the case about Amazon FBA
  • Remember States thought you had nexus before Wayfair, the decision would not have helped FBA Sellers

What should you do?

  • When you get a letter
  • Tell my clients – you can’t afford to bring this case
  • We want to crowdfund this defence – if we win then we all win
  • Declaratory judgement – States being told by the courts that they can’t go after this
  • This is an unnecessary burden – an argument that Wayfair really didn’t have
  • Could use more contributions towards this effort
  • Reach out at onlinemerchantsguild.org
  • Click ‘join now’ and you can join up
  • See the FAQ for info
  • Every dollar that comes in goes to pay Lawyers to get the case out

Contact:

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