Small businesses like S-corps and proprietorships don't pay any taxes now. THey collect income, write off salaries and business expenses and the owners pay income taxes on what is left over.
Business expenses are not taxed under HR25, see post 316. So this is a moot point except for the question of whether or not all the compliance costs will still remain in place to ensure that businesses are now complying with the FairTax code. We get rid of the IRS and replace it with 50 State revenue collectors each with the power to audit?
"Small businesses like S-corps and proprietorships don't pay any taxes now. THey collect income, write off salaries and business expenses and the owners pay income taxes on what is left over.
Business expenses are not taxed under HR25, see post 316. So this is a moot point except for the question of whether or not all the compliance costs will still remain in place to ensure that businesses are now complying with the FairTax code. We get rid of the IRS and replace it with 50 State revenue collectors each with the power to audit?"
Have you ever been through a sales tax audit? I have. I haven't been through an income tax audit, but I know enough about them to know that they are exponentially more difficult to endure than a sales tax audit. The sales tax audit was for a small software company. They sent in one auditor - he was in by 9, out by lunchtime. I dare say that an income tax audit for that same company would have required more than one auditor (which means more than one set of documents being requested) and they would NOT have been out by lunchtime. It would have taken a couple or three days, probably. So equating an income tax audit with a sales tax audit is not apples to apples to begin with.
Second, it is a NATIONAL Retail Sales Tax administered by the states. A business with locations within a single state would remit its NRST through that state. Even businesses with multiple state locations could probably elect to consolidate their return for all locations through a single state - the one their HQ was located in. Even if they didn't do that, there would still be only one state that any single location would have to deal with. I think you are getting this confused with state sales taxes, where any state you sell into would have the right to audit. There wouldn't be any need for that, because you would not have the myriad of state differences to deal with.