The Struggles of Small Online Retailers
Paul McLane from Radio World recently interviewed a small online retailer who would be largely affected by the proposals in Washington to close a retail sales tax “loophole.” Eric Hoppe, founder of Progressive Concepts, discusses how the issue will affect buyers and sellers of broadcast equipment and what the proposal means for small online retailers.
Mclane asked Hoppe, what is Progressive Concepts’ position on the Marketplace Equity Act?
Hoppe replied, “As you know, there are currently two separate bills on the Hill, the Marketplace Equity Act and the Marketplace Fairness Act. If either one were passed, it could have devastating effects on small Internet-based businesses like Progressive Concepts.” He continued to say, “The biggest problem with both bills is that they set the exemption limit far too low for small businesses. One sets the exemption limit at an annual gross sales of less than $500,000, while the other sets the limit at $1 million in annual gross sales. The exemption limit would allow businesses whose annual gross sales are below the threshold to be exempt from the new law.”
Hoppe believes that business with $2 million to $3 million in gross annual sales will lack the resources to deal with added costs associated with bringing their business into compliance with the sales tax laws over 44 new states.
Read full interview at Radio World, Change Would ‘Stifle Small Businesses.’
The new Internet sales tax would punish small business for being successful. While state and local governments across the country are looking for new revenue streams, a state has no place reaching out to the people living and working in adjoining states. If the proposed tax is passed, small online retailers will be forced to collect tax on behalf of almost any state where their customers reside.