Today I will introduce the "Sports Wagering Lottery Amendment Act of 2018" during the Council's Committee of the Whole meeting. The legislation's purpose is to legalize sports betting in D.C. while creating strong regulatory structures that ensure consumer confidence.
N.H. internet business faces uncertainty and possible closure if sales tax protections aren't passed
September 24, 2018
PITTSFIELD — A small business that uses software to broker rare coin and stamp sales on eBay is worried the U.S. Supreme Court ruling in South Dakota v. Wayfair may put him out of business if Congress doesn’t pass a fix.
Joe Cortese, the owner of NobleSpirit in Pittsfield, is worried. Since the Supreme Court’s Wayfair decision, which requires sellers to collect and pay out-of-state sales tax when the buyer is in a tax district with a sales tax, he said he is potentially liable to pay sales taxes in more than 10,000 tax districts across the country, which is too much for him to handle.
And he said the decision could overturn one of the biggest advantages of doing business in New Hampshire; the absence of a broad-based sales tax.
“I would love to know what’s going to happen to New Hampshire and our tax-free status,” Cortese said.
He said his business makes about $3 million each year, which he said places him within the traditional definition of small business, defined by revenues under $5 million.
While many of the specific ways this decision could affect his business remains unclear, Cortese said one thing is certain; he can’t make software smart enough to account for the ever-shifting tax rates and product definitions of 10,000 different jurisdictions.
“It’s a physical, literal impossibility,” he said.
But his company is too small to hire a sizeable accounting department with the staff needed to ensure NobleSpirit complies with all the varied tax laws, he says — such an expense would likely put the company at a net revenue loss.
“This is the fundamental reason why this is such a problem for small businesses,” Cortese said. “Just the fear of audit is enough to scare people out of business.”
He said he is “absolutely” at risk of going out of business if there are no legislative solutions designed to protect small businesses like his. And he doesn’t think he’s alone.
Cortese has an apocalyptic vision of the American economy imploding into another recession or depression if small businesses are required to incur unreasonable costs required to comply with the new ruling.
That’s because a majority of employer businesses are small businesses with fewer than 500 employees.
NobleSpirit is not only a seller of rare coins, stamps and other collectibles, it also makes a software program called Meridian which automates and streamlines the process of posting products on eBay, capturing consumer data, completing the sales and shipping.
As a result, Cortese said he would be responsible for not only collecting the taxes from his own sales, but those of thousands of other subscribers who use his software.
He’s been in business since 1998 and created the first Meridian program in 2002. Cortese said they had about 4,000 subscribers to that program. They are currently in the process of redesigning and modernizing the platform, which will be ready for release soon.
On top of the technical burdens of the new requirements, Cortese also has a philosophical problem with paying taxes in a jurisdiction where his company has no physical presence and, therefore, no say in how the tax dollars are spent. It’s taxation without representation, he said.
Cortese supports a bipartisan bill in Congress authored by Rep. Jim Sensenbrenner (R-Wis.) that would provide some clarity and prohibit states from requiring sales taxes from companies that make less than $10 million in annual sales.
But even if that passes, he said it would discourage companies from growing past that $10 million mark, which he said is bad for him and bad for the country.