My business includes live online classes. I have students all around the US. Am I supposed to now collect taxes on their signup? And am I supposed to look up each person and see if services (my classes) are subject to taxes, which state, county, and city tax applies, are their other reporting requirements, etc.?
And who is going to pay for the accountant and lawyer, the time to figure it out, collect it, file the reports. And will states then all require me to register as a foreign corporation in order to make those filings?!
This is really complicated. It is a potential no-win situation for small businesses and really for any but the biggest like Amazon.
Further, what is the effective date?! Is it from today forward or from some past date within the statute of limitations. And taxes have different one. Many of my students are in states that tax services. Do I now need to audit and for how far back? I never collected taxes, definitely can't afford to pay what wasn't collected, and the chance of me getting people from potentially years ago to cough up unpaid taxes is ridiculous.
Whine? That is too simplistic a dismissal and not fair conclusion.
The only saving grace is “can” instead of “shall”. It would be a good idea to head this off at the pass at your state’s legislature. Contact a rep you know would be friendly to a ban on online sales tax or at least a minimum sales amount to trigger it. Show money lost because of businesses being forced to shut down.
If you don’t sell more than $100k of services in any single state, then it is unlikely that state will ask for taxation. They could but probably be shot down.
most new or complicated accounting processes could be solved by point of entry methods which generate automatic reports.