Will Marketplace Fairness Act Help Small Biz?

Grand Junction, CO, May 22, 2013 -- Garage Flooring LLC, a small business selling garage flooring and storage, is joining a growing chorus of small businesses that are taking issue with the Marketplace Fairness Act, which has passed the Senate and is awaiting House action.

The legislation, which would impose sales taxes on Internet and catalog purchases, has been touted by Walmart, Home Depot and other mega retailers as a bill to help small businesses.

However, according to Justin Krauss, co-founder and president of Garage Flooring LLC, it actually does the opposite of what it claims.

“This bill would force over 20,000 small and medium sized businesses across the country to collect sales tax for all 46 states," Krauss said.

"It would also expose us to a barrage of audits from states where we have no physical presence, voting rights or political representation. It will put many of us out of business.”

Krauss says that the bill has been misrepresented by big business and senators alike.

“There are two huge falsehoods being spread about this bill. The first misconception is that this bill is beneficial to small businesses and the second is that this bill will cost small businesses almost nothing to implement. They are both completely inaccurate.”

Walmart and other supporters claim that the bill will be good for small businesses because it will allow mom-and-pops to compete with other small businesses online.

However, Krauss doesn't believe it.

“When was the last time Walmart did anything to help mom-and-pop businesses? This bill is designed to cripple small businesses like mine and bury us under a mountain of tax compliance and remittance costs. We pose a threat to Walmart, just like all other small businesses because the internet is the last place where we can actually compete on a level playing field with big box retailers and they don’t like it.”

Supporters also claim that a ‘free software’ will be provided by the states which will eliminate the cost of collecting the taxes.

Kevin Hickey of OnlineStores.com says this too is totally false. “The notion that we can simply download a free software and wave a magic wand is absurd. If the cost of compliance is virtually nothing, why does Walmart employ an army of tax attorneys and accountants to sort through tax laws and to deal with compliance. We estimate that our compliance and remittance costs in the first year alone will be over $40,000 dollars. And it gets worse from there.”

Small businesses who sell items online will have to incur additional costs on top of any integration fees as well. “Those of us who sell online will not only have to integrate new sales tax software with our websites, we’ll also have to upgrade to more expensive accounting systems, train our staff on the sales tax laws of all 50 states, submit monthly sales tax returns to 46 states, deal with a mountain of accounting issues such as sales tax exemptions forms, sales tax holidays, tax audits and more!” says Krauss.

Hickey says there’s another massive cost buried in this bill. “Many of us will have to classify products into thousands of different tax categories and face retribution for states if we accidentally mix things up. In Wisconsin, for example, US Flags and WI State flags are usually tax free while other flags are subject to sales tax. That same flag bundled with a flag pole changes the rules. It’s different in every state.”



Other Archived Articles

Armstrong Develops Web-Based Tool for Retailers   Full Article
Lancaster, PA, Feb. 18, 2015 -- Armstrong Floor Products has rolled out what it calls an Advertising & Promotion Center.

Distributor Haines Names Two Vice Presidents   Full Article
Glen Burnie, MD, Feb. 18, 2015 -– Distributor Haines has named Mike Barrett vice president of operations and Bill Rothenbach vice president of human resources.

Producer Prices Tumble on Lower Energy Costs   Full Article
Washington, DC, Feb. 18, 2015 -- Producer prices declined 0.8% in January largely due to falling energy prices, according to the Labor Department.

Housing Starts, Permits Dip in January   Full Article
Washington, DC, Feb. 18, 2015 -- Residential construction starts declined 2% in January to an annual rate of 1.07 million units, according to the Commerce Department.

Dixie Group Reports Loss on Higher Sales   Full Article
Chattanooga, TN, Feb. 18, 2015 -- The Dixie Group, Inc. reported a fourth quarter net loss of $5.2 million, compared to a profit of $1.59 million a year ago.

Mortgage Applications Decline on Higher Rates   Full Article
Washington, DC, Feb. 18, 2015 -- Mortgage application volume plunged last week as interest rose to their highest level this year, according to the Mortgage Bankers Association.

Fuse Alliance Adds Two Members   Full Article
Laguna Niguel, CA, Feb. 18, 2015 -- Fuse Alliance said it has added two new dealer partners in the U.S.

Architecture Billings Contract Slightly in January   Full Article
Washington, DC, Feb. 18, 2015 -- Following a nine-month stretch of positive billings, the Architecture Billings Index showed no increase in design activity in January.

Heavy Snow Dampens Builder Confidence   Full Article
Washington, DC, Feb. 17, 2015 -- Homebuilder confidence fell slightly in February due largely to heavy snow in much of the country, according to the National Association of Home Builders.

New York Manufacturing Expansion Slows   Full Article
New York, NY, Feb. 17, 2015 -- The New York Federal Reserve’s manufacturing index showed that conditions improved at slower rate in February.

NWFA Offers Discounts Through CCA Global Division   Full Article
St. Louis, MO, Feb. 17, 2015 -- The National Wood Flooring Association has announced its new Business Marketplace program, in partnership with BizUnite, to provide members discounts in many business operations.

Surfaces Exhibitors Donate Flooring from Show   Full Article
Las Vegas, NV, Feb. 17, 2015 -- Exhibitors at Surfaces last month committed to donating 140,765 pounds of used flooring to the Mountain Re-Source Center.

Floors and More Wins Chamber Award   Full Article
Benton, AR, Feb. 16, 2015 -- Floors and More recently won a 2014 Small Business Award from the Bryant chamber of commerce.

Patent Board Rules for Tandus in Dispute with Interface   Full Article
New York, NY, Feb. 16, 2015 -- The Patent Trial and Appeal Board has ruled in favor of Tandus Flooring in a dispute with Interface regarding a patent on an installation system, according to Law 360.

IICRC Moves Headquarters to Las Vegas   Full Article
Las Vegas, NV, Feb. 16, 2015 -- The Institute of Inspection, Cleaning and Restoration Certification said it is moving its headquarters to its Global Resource Center in Las Vegas.

Kährs Acquires Minority Stake in Pozgaj Flooring   Full Article
Stockholm, Sweden, Feb. 16, 2015 -- Wood and resilient maker Kährs Group said it has acquired a minority stake in recently formed Croatian Pozgaj Flooring.

Consumer Sentiment Falls from January Peak   Full Article
Ann Arbor, MI, Feb. 13, 2015 -- Consumer sentiment declined in February after reaching an 11-year high in January, according to the Thomson Reuters/University of Michigan index.

Mohawk Group Sponsors HPD Collaborative   Full Article
Calhoun, GA, Feb. 13, 2015 -- Mohawk Group said it has become part of a growing list of “Visionary” sponsors of the Health Product Declaration Collaborative.

Earthwerks Signs Distributor Longust   Full Article
Houston, TX, Feb. 13, 2015 -- EarthWerks said it has signed a distribution agreement with Longust Distributing, Inc. to cover the southwestern U.S.

NAHB Analyzes Data on Boomerang Millennials   Full Article
Washington, DC, Feb. 13, 2015 -- A recent study of “Boomerang Millennials” may have important implications for this key demographic and what it means for the housing market, according to the National Association of Home Builders.