E-commerce has revolutionized American small business by allowing a Main Street store anywhere to become a Main Street store everywhere. Americans benefit from having more product choices, availability and competitive pricing. Small online retail businesses in thousands of U.S. communities are growing and creating jobs in their hometowns. Unfortunately, these businesses are often too small to have a seat at the table during the legislative process. For example, current proposed Internet sales tax legislation threatens to hurt the growth and job creation potential of small online retailers, threatening the way they do business and ultimately stifling economic growth across the country.
For example, if the Internet sales tax legislation currently before Congress is passed, web-enabled retailers will be forced to keep track of more than 9,600 tax jurisdictions across the U.S. That daunting responsibility is nearly impossible for the majority of small businesses. The bottom line is this: It is not the job of small businesses to collect taxes for state and local governments where they don’t live, do business or receive government services - it is unfair, unwise and it will undermine innovation.
Small web-enabled retailers already face proportionally higher operating costs compared to large national retailers – including providing employee benefits and shipping costs – and unlike big box retailers, small businesses can’t negotiate tax rates, shipping rates and favorable cost of goods. The proposed legislation would further undermine their ability to compete and continue to drive online innovation and pave the way for the future.
Most importantly, our members want to be recognized for what they are: innovative entrepreneurs using the Internet to grow their small business. The numbers show this to be true. Today, 60 percent of small, Main Street retail operations also have an online presence. Web-enabled retailers, just like traditional small businesses, are also contributing to their local economies by paying property taxes, hiring employees and volunteering in their local communities.
All of the Internet sales tax bills currently on the table are fundamentally flawed and anti-small business. We need a tax policy that accurately reflects the growing and evolving world of commerce. Requiring everyone, regardless of size, to collect sales tax will stifle economic growth, job creation and competition. It's a blanket approach that favors big national players while penalizing entrepreneurs and small businesses that we want to grow and prosper.
Even the head of the largest online retailer said they wouldn’t collect sales tax for states unless the government forced them to.
While some policy makers would like you to think this legislation is inevitable, that is simply not true. We formed the coalition because these small business retailers – our members – should have a seat at the table as policymakers make decisions that will impact their businesses and their potential to grow.
Bond is the executive director of WE R HERE. Previously he served as the president and CEO of Tech America and as under secretary of the U.S. Department of Commerce for Technology.