Ross Hunter’s Factually Challenged Marketplace Fairness Act Statements

While I’m impressed a Washington state legislator did reply to one of the Emainstreet member’s op-eds in the Seattle Times, his response was both insulting and demonstrably false.  But first, let’s cover his recent blog post on the topic since it’s completely wrong and comments are moderated and might never be published.

Off-topic, why do elected officials (he’s a rep for Washington state, not a congressman) feel free to attack a small business owner while completely misunderstanding the topic he’s lecturing us on?

 

Him:

 “If he really had to do that, I’d agree with him. Of course, under the structure of the bill in Congress he won’t have to. All versions of the bill require that the states pay for software services that would be available free to the business collecting the tax. He would sign up with one of the providers and they would file all the returns for him.”

Me:

Frankly Representive Ross, you quite simply don’t understand what the Marketplace Fairness Act does and does not do. While I appreciated that you commented on the original editorial, your comments were demonstrably false (I replied). And so is what you’re saying here.
Reality: MFA does NOT require the states to pay for software services.
States are required under section 2 to provide:
“software free of charge for remote sellers that calculates sales and use taxes due on each transaction at the time the transaction is completed, that files sales and use tax returns, and that is updated to reflect rate changes”

What this means is the state has to provide some kind of software. The state could work with a certified provider, it could work with someone else or it could write its own software. And EVERY state can pick it’s own solution as long as it meets that criteria. We can’t integrate 46 solutions. No one can.

Also in section 2: MFA covers that states are required to have a “single sales and use tax return to be used by remote sellers to be filed with the single entity responsible for tax administration”. THIS IS PER STATE.

So your assertion right off the bat is completely incorrect. And all of this is in the 12-page MFA bill, not buried in the SSUTA agreement. Yes, there are up to 46 states to file and no, we don’t sign up for someone to do it for us for free.

The only way we can simplify it some, is to PAY someone like Avalara who can handle some aspects of our operation, but even they can not handle our fairly simple setup. The shopping cart is barely the tip of the iceberg regarding sales tax. The order processing software we use is actually more important, that’s where we charge people, may refund an order, or even partially refund an order. Or refund, but not their shipping charge upon return of product. All of these things need to be handled and states handle these refund scenarios differently and are also even time-dependent for some states.
And they can’t handle our Amazon orders, which we also sell through.

So will you agree with Peter now? Because your above statement is incorrect. MFA has a lot of fatal flaws that myself, Peter and other retailers are trying to address. Looking forward to you swapping sides on this issue and pushing for TRUE simplification and true fairness to the process. Bring that to the table, I’m on board. But it’s not there.
If you want more details about what we as store owners would generally agree is a fair approach, it’s on emainstreet.org.”

His comments to the Seattle Times article were quite wrong as well.  Deliberate?  Or ignorant?

“For free, you can work with a number of vendors who will process your sales taxes for you, managing all the reporting, tracking rates, etc. For free. This is probably easier than you have it right now. Tryhttp://www.avalara.com/, or there are other vendors if you don’t like them.

Of course, anyone who has involved themselves in the campaign against fair collection of sales tax already knows this and is choosing to not say so in the article.”

With respect sir, you don’t know what you’re talking about and more importantly, it’s demonstrably false. You’re accusing opponents of the MFA of lying by omission, while making clearly false statements. I’ll assume ignorance, but a state rep commenting on an issue should have some grasp of the issues involved before making such a claim.

Avalara and other sales tax compliance vendors are for-profit, sometimes venture funded (like Avalara) and are not free. One has no service charges, but barely supports any platforms and 2 of the top 10 shopping carts. And the cart is merely the tip of the business processes revolving around sales tax collection. They don’t support Amazon sales, our order processing software or our cart. Avalara can support our cart only at this time, which is useless. And no, you don’t file 1 tax form. The state’s requirement is to provide some way of doing taxes online. Nothing is to stop them from all choosing their own approach, leaving us to individually deal with all the “free approaches” or pay a single vendor. But even that is not remotely ready for prime time.

The myth of “free software” is just that, a myth.

And more importantly, the audit risk is completely unacceptable, I’m not willing to play Russian roulette with 45 states looking for revenue while the owner is personally liable. None of your local, non-remote businesses faces these risks, nor should they. Nor should we.

I’d recommend reading my Wall Street Journal opinion piece on it from August 8th 2013, it covers these issues and more. Clearly some education is required on the issue. There are MANY legitimate problems with the legislation and there has been almost zero true simplification from the SSUTA states.

 

 

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