We knew this was coming: Internet Sales Tax

Interesting thought regarding Internet sales tax. I did some very light reading, and nearly all of the states have a minimum amount of business required in the state, typically on the order of $10K to $100K minimum receipts, per year, before you’re required to collect and forward that. Some also have a threshold number of transactions of some dollar amount of more.

Which means that nearly all small internet-based businesses will be completely exempt except for a) where they actually live and work, and b) states with no minimum.

Did I hear you say “status quo”?

So for me and people like me, it seems the thing that’s going to happen is that I simply will collect NO sales tax except for WA purchasers until my payment service (PayPal) sets up a tax-handling system for purchases.

Why? Because otherwise how are they are going to ever find out that I did business there? After all, if my transactions are on the order of well under $100, without a central record of that (blockchain be damned!), they’d never have a paper-trail long enough to establish that level of business. What…every state is going to subpoena the PayPal records of every merchant? I suspect that’s unlikely, given the capture-rate of n’er do wells is likely tiny. Remember, the IRS doesn’t prosecute anything but the largest miscreants. Plus, except for having not done MY paperwork, in the end an audit would show I’m be well under the minimum, case closed, have a nice day.

So, does that then mean that small shops might start prospering MORE than without the rule change? The larger ones will definitely be taxed, but can also afford to pay those expensive state-specific revenue numbers?

Either way, I hope it’s not just a ruse to force all sellers to give up their private-label sites and be forced by the complexity burden to use a fee-based selling service.

Yes, the times they are a changin’;….