South Dakota vs. Wayfair: Why we should make sure Wayfair wins

I haven’t written here in a while and I don’t typically posts thoughts on the ludicrous things that government or people do; I couldn’t help myself.

I don’t know if you’ve heard of this South Dakota vs. Wayfair case that hit the Supreme Court. South Dakota wants internet sales to be taxed and Wayfair says this is next to impossible to do and could really hurt small businesses. Well they would be right.

I’m sure SD has stated that the revenue from taxes will help schools or firefighters or something equally appealing which tugs at our heart-strings and overlooks the fact that they literally want to make buying online next to impossible.

Companies like Amazon already charge and track internet sales and sales tax all over the country (and world I assume) but they are a massive company and do a huge amount in sales and have the money to pay someone to track all this stuff and constantly pay states. Not only that but they likely have a warehouse in your state where that package will be coming from (they are selling from there). I know this because I have sold to Amazon and their list of warehouse locations are impressive.

But what if you have an internet business of selling antiques you’ve found at garage sales or you are an artist selling paintings, drawings, anything you’ve made. Say you are selling to California (my home state). California will tell you the sales tax is 7.25%. But if you sell something to a person living in LA or San Francisco it is considerably higher there because each county can add to the base sales tax. This means you have to figure out what the sales tax is in John Doe’s town and charge him. How will you know this? How will you implement this on your site? How will you track literally THOUSANDS of sales tax locations? How will the service you are selling through implement this? Beats the hell out of me. Likely they won’t. They will leave it to you.

Now whatever you use to track your sales, and pay your taxes for the state you live in, now has to track every state and from the sounds of things every county in the US.

I’m sure there is a minimum you have to earn. Who knows what that will be for any given state.

I’ve heard the argument that shops don’t find it fair they have to pay their local taxes when a customer can just go online and buy it. That is called Free Enterprise.

These sellers are paying taxes in their respective states as it is. So why are they being taxed again? Prices will go up and people will not be happy. Then they will need to make more money to afford some purchase online. They are inflating the price of things by taxing everything in sight.

And what about the buyer? Forget the fact you are used to paying sales tax. Now, a seller online which has an item you really want doesn’t want the hassle of dealing with figuring out what your sales tax is. Have you ever been to a sight that literally tells you they won’t sell to your state or that it is a in store buy only. The frustration. People are going to start using the internet to tell you what is in their store and you’ll have to figure out how to get it.

Since South Dakota is the only state doing this so far, I say stop selling to anyone in South Dakota. Yes, this punishes the people but then maybe the noise they make will tell South Dakota they are making a huge mistake and essentially driving small businesses under.

This is just my rant but it is explained very well over at Digital Commerce.



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