As many of small-business owners can attest, businesses have been attempting to maintain their own survival during this recent Great Recession.
Recent headlines are buzzing about the U.S. Senate’s bill to tax online purchases made by consumers. Decidedly, the Senate sided with brick and mortar retailers, state, and local governments by passing this measure. Currently, the bill is sitting in Congress. The stage is set for a showdown in the House of Representatives.
This law could very well have widespread implications especially for small-business owners. It’s no secret that online afforded entrepreneurs with low entry costs to start a business. A bill of this nature could very well change the dynamics for small-business owners selling products or services online. Here are a few noteworthy points to consider:
• It would be an expensive obligation on small businesses because many are not as prepared as big box retailers to collect and remit sales taxes across each state given the variety of rate structures. Hence, this would increase the resources needed for small businesses to continue to do business online.
• Passage of this bill would mean that small businesses would have the same tax-compliance obligations and face the same prosecution risks as big box retailers. This is despite the fact that these small businesses, typically, are located in one state.
• The current language does provide that businesses with less than $1 million in online sales would be exempt.
• Consumers who actively purchase online may not have a tolerance for seeing increases in products purchased online. This could, unfortunately, negatively impact ROI for small businesses.
The latter implication with the consumer could be a problem for many small businesses. Many consumers are already cash-strapped.
For consumers, any savings realized from online purchases is a welcome relief. Small-business owners continue to face many pressures. It is important to keep your pulse on what legislation is being actively discussed in Washington. In the end, it could unquestionably impact how you go to market.
Adele Lassere is a marketing/advertising consultant with 20+ years of experience, freelance writer, and author of “Elements of Buying: A How To Reference Guide on Advertising for Business Owners”; available at amazon.com. Adele was listed on Black Enterprise’s 2011 Top Execs in Marketing & Advertising and Black Enterprise’s 2013 Top Women Executives in Advertising & Marketing. Contact: [email protected]
