jadebox - 10:21 pm on Jun 5, 2013 (gmt 0)
I think that the exemption for companies with gross sales of $1 million or less is either too small or it's too large.
I think it's too small (or based on a bad metric) because a business doesn't have to be very large to hit that amount of sales. And they may be making little or no profit on those sales.
On the other hand, if this bill actually places little burden on businesses (as the sponsors suggest), then I'd have ask why the exemption is so high.
My wife and I run a small direct-mail business. We have far less than $1 million a year in gross sales, so we won't be affected by this bill when it passes (though, I'd expect the exemption to be lowered over time).
A small percentage of our sales are in-state and what we have to do to handle collecting and reporting sales tax seems silly in comparison to the small amount that we collect for the state. The idea of having to do the same thing for sales to other states is scary.
I'm not confident that the bill would really make the states simplify things in a way that wouldn't make it very expensive to manage (and wouldn't offer unfair advantages to in-state competitors.)
Based on what we have to do now for in-state sales, the software described in the bill is going to have to be able to determine the proper tax rate for each product that you sell. It's going to have to determine the customer's location and the tax rate for that location (it can vary within a state). It's going to have to know if the customer is exempt from paying sales taxes and if the exemption applies to the products being purchased.
Most of the products we sell don't have a standard identifier, such as a UPC. If we were subject to this bill, we'd probably be required to categorize or id every product so that the software could do its magic. That would be expensive and time-consuming even with our small inventory.