Chances are, yes.
Nearly everyone who pays or collects sales tax will be affected. State, county and local sales tax is currently directly collected by merchants who have a physical presence in the state. Persons purchasing goods that are delivered from other states are still required to pay this tax. However, it’s not charged at the point-of-sale – this tax is to be paid via personal income tax returns. Most states have failed to properly enforce this law and now want to pass the burden onto out-of-state businesses who shouldn’t be responsible for fixing irresponsible states budget and tax collection problems.
Large businesses are affected
Larger businesses are affected in that they will now have to collect sales tax for states in which they have no stores, warehouses or any other physical presence. Much added accounting and financial staff will be necessary, however many of these larger businesses have the financial prowess to absorb these costs. Some of these companies even support the MFA, likely due to the decreased competition they expect when smaller businesses are unable to cope with the costs. However, even for a large company, this isn’t pocket change and may still translate into slightly higher prices for the consumer.
Small businesses are affected
Small online companies are hit hard with this proposed new law. Companies grossing over $1,000,000 annually will be required to collect and remit sales tax to 46 states and abide by the obscure tax codes of literally thousands of different tax jurisdictions nationwide. Accounting and compliance costs will be staggering. These businesses will be exposed to dozens of tax audits from remote states. Small online companies, many of which have already had their profit margins cut paper-thin due to competition from the retail giants, will be severely crippled or unable to cope with these added costs and liabilities. Those who do survive will have to drastically raise prices.
Traditional businesses also have a high probability of being affected. Many traditional small businesses ship or deliver their products and services across state lines. The MFA opens the door to holding these business owners responsible for collecting taxes from these sales though they have no physical presence in the destination state. The smallest will be completely unable to handle filing a whole slew of individual tax returns to individual states. These business owners will be exposed to accounting cost increases many-fold. Additionally, much added liability will be taken on due to the possibility of incorrectly deciphering complex tax law and thereby under-taxing or over-taxing their customers.
The average consumer will be affected by price increases at their favorite stores that merchants will be forced to make to compensate for extreme accounting and compliance cost increases. Many average Americans may find they have less stores to choose from due to the closures of those unable to cope, resulting in reduced choices and even more of the market share being gobbled up by the retail giants. Many persons in states without sales tax may find their favorite online merchants inadvertently charging them anyway as a result of complex tax codes and the requirement to keep track of thousands of them. Persons in states that currently have a sales tax may find themselves being charged the wrong amount for the same reasons.