A possibly not so hypothetical question. How would it affect your eBay or Amazon business if an Internet sales tax were implemented?

Would you be able to implement the bookkeeping and write the checks necessary to submit the required sales tax to every state your buyers were located in on a regular basis? Or, would it put you out of business?

Earlier today Skip McGrath began his blog post - “eBay and Online Sellers, Get Ready for Internet Sales Taxes in 2009” - with the following words:

The new congress and the new president have signaled their willingness to require all on-line sellers to collect and pay sales tax

I have to say I pretty much agree with everything Skip says and strongly urge you to read both his post and the Forbes article he references.

If an internet sale tax is looming in the near future, I only see two circumstances under which hundreds of thousands of small sellers will be able to survive.

• Rather than enacting legislation that allows individual states to collect Internet sales taxes, a national sales tax would be enacted. Sellers would be required to collect a set percentage of sales tax on every transaction and submit that tax the a national entity that then distributed it to individual states.
• If a national sales tax weren’t implemented, large on-line sales venues such as eBay and Amazon would implement some kind of process by which they collected the sales taxes owed on individual sellers behalf and submitted them to the appropriate states.

With either of these two potential solutions there are a myriad of problems that would have to be solved before they could be implemented.

I would urge everyone to write or call their elected representatives in Washington and let them know that you are on record as being 100% against any Internet sales tax. If you don’t know how to reach them, their contact information is available here.

Photograph by Kathleen Franklin.

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