Online Sales Tax Could Make Huge Impact on Small E-Commerce Businesses


RENO, Nev. -- The days of tax-free internet shopping are close to coming to an end thanks to a new bill passed through the U.S. Senate yesterday.

Currently, the law says that states can only require retailers to collect sales taxes if the company has a physical presence in the state, which means it could put a pinch on the local e-commerce companies.

It's an unforseen expense. While most of us shop online for convenience, states are losing out on billions of dollars to online shoppers because they aren't collecting the sales tax. Under this new legislation, you might see a larger charge on your bill the next time you check out online, which means an added job for someone on the other side of your computer.

Laura Zander owns a multi-million dollar company in Reno, called Jimmy Beans wool, where 99 percent of its revenue comes from online sales. She says it's going to be a big problem for smaller online businesses.

"It's going to be a huge resource and economic burden on a business like ours," she said. "Businesses that are one million to 10 million in sales let's say, most of us are still in our infancy stages and we're still growing, we're self-funded, we don't have 50 million dollars in the bank to hire and engineer or hire somebody to deal with all this."

It would mean they would have to keep track of state, county and local taxes from across the nation. For bookkeepers, it would be a nightmare.

"It's going to cost us I can't even imagine, 50 to 100 thousand dollars a year at least I mean a lot, the equivalent of multiple jobs...those are resources that we could have spent to help grow our business," Zander said.

For years, customers have been enjoying the tax-free shopping online, but now they could lose that luxury.

"That's why I shop online a lot of the time, besides the conveniences, it's kind of an added incentive, but these loopholes have to be closed periodically," Jeanne Giles, online shopper said.

The bill is meant to even out the playing field between brick and mortor stores and companies in cyberspace. Some say it's a necessary evil.

"It needed to happen, honestly, I think it's something that the states need to have happen," Giles said.

"I mean as long as it goes back to programs in the state, it's going to come back to Nevada...I'm ok with paying a sales tax," Rachel Roden said.

Right now, the legislation still needs to go through the house before it can become law and President Obama has come out in support of the bill.

Even if the bill passes, buying online is still cheaper than going to a physical store that has to pay rent, utilities and its employees.


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