nobody.
watching out for wayfair:
calamity or opportunity for accountants?
join the survey. get the answers
by 卡塔尔世界杯常规比赛时间 research
卡塔尔世界杯常规比赛时间-avalara business confidence index
in 2018, the supreme court endowed american businesses and accountants with a massive migraine known as the wayfair decision.
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the 卡塔尔世界杯常规比赛时间 barometer – avalara business confidence index didn’t turn up much love for wayfair. in fact, not one comment spoke well of it. the vocabulary said it all. among the words we heard: burden, headache, pain in the butt, mess, awful, hardship, nightmare, complication, costly, detrimental, wasted time, potentially catastrophic, quagmire.
but perhaps the single most common comment was “i don’t know.”
it was a 5-4 decision. the court ruled that states can generally require out-of-state sellers to collect and remit sales tax for in-state sales even if the seller has no physical presence in the buyer’s state.
it isn’t the money
the decision exempts smaller companies that do little business in any given state. but for other companies doing substantive interstate sales—i.e. just about everybody selling over the internet—the bureaucratic burden can be crushing. not all states require the interstate tax, but why wouldn’t they, now that they can? how long until virtually every business has to grapple with 50 different state tax bureaucracies?
it isn’t the money. retailers won’t see a change to their bottom lines. buyers pay the tax, and out-of-state and in-state sellers will be at a competitive par, a boost to main st. brick-and-mortar businesses.
or, as michael kridel explains it, “online competition will increase as the price point differentiation offered by no sales tax purchases is rapidly evaporating, creating less disparity for buyers.”
state tax collectors may be the only people hearing the sweet sound of “cha-ching.” but even they should be worried. interstate sales tax may add much-needed revenue to state treasuries, but at the same time, it may exterminate many medium-size interstate retailers in those states.
louis alfred nickolas stalwart, of hallandale beach, fla., puts it simply: “many small businesses will either close their doors or ignore the requirements a la wayfair.”
brian metzger, a principal at grizzle, glenn, adams & martin, in northeast georgia, takes that notion a step further, pointing out the unfairness of it.
“it will make it much more difficult for small businesses to scale up their online commerce operations,” metzger says, “leaving only the largest players (amazon, etc) to be in full compliance…which is why amazon and others are fine with wayfair.”
bureaucratic boulders
but annette saarinen, of accountax of oregon, inc., recognizes one fair side of the new way of doing business. “the reason e-commerce was so popular was to avoid the sales tax,” she says. “it gave an unfair advantage to online companies. all people should pay the sales tax as it applies in their states. it’s putting the sales tax issue onto a more level playing field.”
a level playing field is fine, of course, but who wants to play on a level field strewn with bureaucratic boulders and legal landmines?
a certain anonymous cpa, whose clients are mostly not in full compliance with requirements, sounds especially bitter, telling us, “more greedy politicians, more unnecessary work for accountants, will suck more money out of the economy, but the politicians don’t care.”
felonious territory
apparently, a lot of clients are not in compliance. the barometer revealed that just over two percent of respondents say all or almost all their clients are in full compliance, though another 12.2 percent say theirs are mostly in full compliance.
in other words, a good 85 percent of american cpas have client retailers who are in the felonious territory.
many barometer respondents admitted to not yet having enough information about how interstate sales tax will work, what kinds of software will be available, and how smaller businesses will deal with it all. the answers and fallout should become apparent just in time for next year’s business barometer.