They have no concept of what it takes to run a business and the havoc that their so-called “good intentions” will bring.
Is it just me, or does anyone else wonder if it is just “good intentions” or if there is some underlying benefit to a political contributor that drives them?
Whatever, let us look at the usual unintended consequences that they are creating. And to do that, we will start with the State of New York and its Sales Tax Form.
The Sales Tax Form of the State of New York defines 81 different taxing jurisdictions that have the right to set their own rate. An internet vendor from anywhere in the country will have to know by zip code which tax jurisdiction, and therefore which tax rate, applies to any particular sale in the State of New York.
Now factor in the other 49 states and you can start to see the paperwork headache that is going to be dropped on the small businessperson who our representatives claim they are there to help.
Yes, New York State (NYS) offers a Vendor Collection Credit for doing the paperwork, but that is limited to $200 (the equivalent of $4,000 in sales). Now that would be fine if they only had one sale for $4,000, but what if they had one $50 sale in each of the 81 taxing jurisdictions? Besides the dimwits in Congress, does anyone else think that is sufficient compensation to be a bookkeeper for NYS? Or all of the states? And I am not sure that any of the others give the vendor a credit like NYS.
But wait, Congress feels the pain and has exempted companies with sales up to $1 Million. As if that is some magic number.
Do they not understand that the amount of a gross sale has nothing to do with the company’s ability to absorb the increased costs that this legislation will bring to the internet vendor? It depends on what their gross profit percentage is.
I do not understand why Congress would get involved in what is essentially a state issue. (Remember how they passed a health care bill without reading it? Where are you spending the savings that were promised to you?)
Unless, after the chaos that is bound to ensue, they decide to move to a National Sales Tax.
Is that their real goal in this process?
Howard Lipset, CPA
Progressive Management, Inc.