How many of you shopped online for Christmas or Hanukkah gifts? There is no doubt that there are some who relied on internet retailers for gifts, and I am pretty certain that you paid sales tax on the purchase through the retailer.
On Sunday, I was scanning through the Richmond Times-Dispatch and came across an article on the threat of more internet sales taxes being imposed on retailers. It was interesting, especially considering that more sales taxes will hurt many small businesses, who are online retailers in the Commonwealth of Virginia.
The author of this editorial mentions that legislators in Congress are receiving pressure from big box retailers to limit the competition from the small businesses, who may offer lower prices. The plan is to force the small online retailers in the Commonwealth of Virginia to charge sales tax on those from other states. This move will no doubt place a burden on these retailers, especially on those who operate a small business from their homes, etc.
One of the reasons we believe that the bills being considered are anti-small business is because they propose new and unfair definitions of what a small business is. Various forms of the Internet sales tax legislation now before Congress limit the exemption to companies selling as little as $500,000 in goods online.
But the Small Business Administration, charged with fostering opportunities for small businesses, defines “small” in the online community as retailers with sales up to $30 million annually and it seems reasonable to us that the SBA should be given the flexibility to determine the level of this critical small business protection. Rather than sales numbers, the agency might tie new national sales tax obligations explicitly to companies with the personnel resources to comply. The Family and Medical Leave Act, for instance, applies only to companies with 50 or more employees.
If there is one thing, we need to keep small businesses and innovation thriving. Without small businesses, the economy is going to continue to head in a downward spiral.