Saturday, November 30, 2013

Could Internet sales tax hurt authors or filmmakers who want to sell directly to consumers over web?

USA Today on Friday (November 29, 2013) offered a pro and con “opposing viewpoints” analysis of the proposed Internet sales tax.  While the newspaper thinks it would level the playing field, the opposing view is that it would hinder or kill startups that want to see through their own websites rather than outsource to huge ecommerce sites like Amazon. The link for the opposing view is (website url)  here
Sometimes, filmmakers and authors do prefer to sell through their own sites, which means they need to meet some privacy guidelines in setting up their own e-commerce.  (One of these artists, selling (the film “Codebreaker” about Alan Turning) through Transit Media, told me it’s easier to recoup investor money as needed with the profits if you sell it only yourself.)  Major hosting ISP’s can generally service this.  Will they now have to run an application to charge and route a sales tax to the purchaser at his point of origin (rather than where the good was sold from?)  Would shared hostin ISP’s be able to provide the sevice?  How much would it cost?  Would apps be available for businesses that run their own servers (rather than host them)?
It would be fine for a low-volume sales operation (like mine would be) just to keep track of the sales and pay the states of origin once every three months manually.  That probably wouldn’t be a problem if states allowed it.

When I set up my original “High Productivity Publishing” in 1997, I sold the books myself, took only cash or check (and a lot of people were OK with this then).  I did have to get a sales tax permit from Virginia and later from Minnesota when I moved to Minneapolis for a job transfer.  That was manageable.  I don’t know if the new arrangement would be OK.  

Update:  Dec. 3

The Washington Post has a front page story by Robert Barnes, "Justices won't hear case on Internet sales taxes", link here. The decision is curious, in that the Supreme Court doesn't seem to be as busy as usual this season.  Critics say that the Court should give guidance on this issue, to let smaller online retailers know what the rules really are going to be.  

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