Would an Internet Sales Tax Kill Small Businesses?


How much different would life be if states could charge an Internet sales tax? This is a question that has long been argued at different levels of government and business. The argument could finally be coming to a head, as the U.S. Supreme Court is set to rule in South Dakota v. Wayfair in the coming days. 

South Dakota, together with several other states, wants to force Wayfair, and other online retailers, to charge consumers sales tax, just like any other retailer in the state. The problem is Wayfair does not have any stores in South Dakota. So the argument is why should consumers be forced to pay a sales tax to their state when making a purchase from an out-of-state retailer? 

Of course, businesses and consumers alike oppose the idea and according to billionaire Steve Forbes, if the Court were to enforce an Internet sales tax for states it would have far reaching consequences, especially for small businesses. 

For starters, small businesses with only a few employees would be forced to comply with more than 10,000 state and local tax jurisdictions. In most cases, small business would not have the manpower or resources it would take to collect and pay these taxes. 

According to Forbes, that would be lost time to build and grow their businesses. Such a decision could also lead to a much broader Internet sales tax. Many small businesses could be forced to choose whether or not staying in business would even be worth it. 

Lastly, Forbes says: “This burden would damage interstate commerce and the national economy as a result. For the same reason, the Supreme Court and our elected officials should reject this tax grab and instead uphold the principle of protecting small business owners from burdensome taxes in distant states.” 

Tell us what you think of an Internet sales tax. Share your opinions by commenting below. 

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