Thread: Internet Sales Tax Questions - Marketplace Fairness Act

I have been doing some research on the proposed legislation regarding the Marketplace Fairness Act.

1) Based on my research it looks like aspdotnetstorefront.com has a plug in using Avalara AvaTax. I looked at their program and it appears Avalara charges a fee per transaction for their tax service. Does anyone use this? How does it work? Is it expensive?

2) I also visited the website http://www.marketplacefairness.org/ . Their website indicates that http://www.taxcloud.net/ is free software that plugs into websites and calculates the various sales taxes from different states. Yesterday, I spoke to a representative at Tax Cloud and they said there are NO FEES at all to use their software. It is totally FREE. However, the representative said they had contacted aspdotnetstorefront.net about integrating their program into their ecommerece software. According to Tax Cloud they will even provide funding to help ecommerce platforms such as Vortex integrate their software with the Tax Cloud program. Tax Cloud said so far Vortex has not expressed an interest in integrating their cart with this option.

Does anyone use Tax Cloud? Can anyone share the steps needed to integrate Vortex shopping carts with Tax Cloud?

Here is an email from Tax Cloud that I received this moring after signing up. It explains why their service is FREE.

Thank you for registering for your new TaxCloud account!

The TaxCloud service is available entirely free of charge. This is possible because we are paid commissions by state governments for sales taxes collected.



Other features:

There is no software or database to install. Rather, the relevant tax data is delivered to the shopping cart over a real-time web services API.

The service can calculate correct local sales tax rates in every U.S. taxing jurisdiction (13,000) and account for type of merchandise, exemptions and tax holidays.

Comprehensive reporting is provided at month end.

TaxCloud can be responsible for tax filing & remittances on behalf of the merchants.

Merchants are indemnified by the “Streamlined Sales Tax” states regarding the accuracy of rates and in many cases they are granted amnesty regarding past failure to collect sales tax.



TaxCloud has been integrated into many shopping carts and more are added all the time.



Let me know if I can provide any further explanation of TaxCloud's capabilities and business.



Thanks



Carl



--
Carl Stefanelli
VP Sales
FedTax
Direct Line: 203 998 0839
Main Line: 206 452 1686
CStefanelli@fed-tax.net
http://taxcloud.net/

In reply to an email I sent them:

TaxCloud can do lookups for all jurisdictions in the US, including HI & Alaska. We do not do Canada, but probably will in the first half of '14. No plans for Mexico at this time.
Carl

Will Vortex be adding TAX CLOUD as an option?

Since it is FREE and TAX CLOUD will provide money to VORTEX to pay any related expenses to integrate it into their software I would think they would take advantage of it. The add on AvaTax that Vortex currently supports will be charging a fee for every transaction where the sale tax is calculated and applied to a sale.

I would hope TAX CLOUD will be an option after watching the Senate this week regarding Internet Sales taxes. It is coming...

Does anyone from Vortex have a response?

We also want to know if Vortex be integrating TaxCloud if the Marketplace UnFairness Act goes through?

Please call, email, and fax your U.S. Senator & Congressman and provide your opinion on the Marketplace Fairness Act. The Senate votes on this next week. Then the House will look at it. There is still time to try and get them to change some of the language. This is an attempt by big business to try to limit the growth of small business.

Big business "Best Buy’s chief lobbyist, Laura Bishop, flew to Washington on Wednesday to meet with Senate staffers to reiterate support for the bill in anticiaption of Friday’s vote." http://www.startribune.com/politics/...1.html?refer=y

Unfortunately, small Internet companies cannot afford to fly to Washington to meet with Senate staffers. I did speak to my Senator's staffer on the phone but I felt like I was talking to a wall.

Here is the letter I faxed yesterday to all of the U.S. Senators. I also sent it to all of the news outlets I could find. Please write your own letter or copy and past it somewhere online.

The last section has to do with Tax Cloud.

To whom it may concern:

Please take a moment to read my concerns about the "Marketplace Fairness Act (MFA)."

Scheme or Device Enforcement of the Law

Regarding the wording in the MFA, "Persons with 1 or more ownership relationships shall also be aggregated if such relationships were designed with a principal purpose of avoiding the application of these rules."

In my former career as a Special Agent with the U.S. Department of Agriculture Office of Inspector General (OIG), my primary investigations involved individuals circumventing the farm payment limitation provisions. This legislation will create many "sham" entities/businesses (similar to the farm program) where businesses will be set up under other people’s names to avoid exceeding the $1 million limit. You will be creating new legislation that will require massive amounts of federal and state tax money to enforce the provisions. As in the farm program, anytime a dollar limitation or threshold is made on a business through regulation it will create fraud.

Small Seller Exemption less than $1 Million

If this legislation goes into effect in 2013 we would be forced to collect sales tax because in 2012 we had $1.4 million in gross sales, but we did not keep track of our non taxable “remote sales” from out of state. Had we kept track of the non-taxable “remote sales” from resellers and nonprofit groups; most likely we would be able to claim less than $1 million in taxable “remote sales.”

I believe a grace period needs to be implemented so small companies can change their accounting practices to properly track “remote sales.” Law makers should consider increasing the small seller exemption for the first few years and then reducing it over time. The technology advances on sales tax reporting will improve over time and allow small companies to more easily transition into the changes.

Accounting Procedures: Tax Cloud Issues

Tax Cloud is the FREE software that plugs into websites and calculates the various sales taxes from different states. Some Senators that support this legislation are saying it will be an easy transition for ecommerce businesses to comply with the proposed legislation because they simply plug their websites into this free software. Currently, my ecommerce platform does not offer a plug in to this free database; they have a connection set up with another company that will charge a fee for every sales tax calculation made. I spoke to a representative at Tax Cloud and asked them how we would handle telephone orders. Many of our orders are not processed on line but are also taken over the phone, via purchase order, and mail order. Tax Cloud said their software only works for on line orders. Therefore, we would be required to provide separate uploads of data showing additional taxes we collected from other methods.

We use QuickBooks to do our accounting (as do many small businesses). There is another company that plugs into QuickBooks that allows you to upload your sales tax data; however, they charge a $0.60 fee per transaction to calculate the sales tax. Again, this is basically our "transaction tax" for collecting taxes for "another state." This will cost us MORE than our credit card transaction fees, per transaction. This would cost a business like ours an additional $1,200 to $2,200 a month. The FREE software that is mentioned by the Senate does NOT have any streamlined integration for telephone, mail, and fax orders.

Tax Cloud also said they have contacted many ecommerce platforms and QuickBooks and they show no interest in developing an easy plug in to use their FREE software. This is probably because they have agreements with other companies that are going to charge for this service. This transition is not as easy as merely plugging the FREE software into your website as some of the Senators allege.

I believe there needs to be FREE options available for all ecommerce platforms and offline transactions if this law is passed. The FREE option that supporters are saying is easy to implement is wrong.

Please consider the issues I have raised when considering this legislation.

Thank you for your time,

Sincerely,

Thomas L. Carlson
Vice President

Some good news. I spoke to Tax Cloud this morning. The day after I faxed my letter to the U.S. Senators offices Quickbooks did contact Tax Cloud. Still nothing from Vortex....

I also emailed T-Hub and suggested that they talk to Tax Cloud. I think their T-Hub software could be easliy modified to upload sales tax data to Tax Clouds Server with the push of a button.

I have a developer looking at the costs to make an add on for my websites for Tax Cloud. If anyone is interested I will share the information I receive.

I am also meeting with one of our U.S. Senators staff members on Friday to discuss some other issues involving the pending legislation. If anyone has anything you would like me to ask them let me know.

Tom Carlson

Yes, please keep posting in information you receive on this project.

I received a quote it would cost about $1,500 to have all of my sites connected to Tax Cloud. I have 3 separate sites.

I am going to wait and see if this legislation passes. If they raise the $1 million small seller limit I will not have it done.

After conducting alot of reasearch I did find that avatax does have a free option.

http://www.avalara.com/products/avat...ined-sales-tax

I am not sure why it is so hard to find. I looked everywhere and all I could originally find is the one they charge for.

I spoke to the Streamlined Sales Tax & Use Tax organization. They said they will subsidize any transactions where you DO NOT have a physical presence for collecting sales tax. If they handle transactions in states where you have a physical presence they will charge you.

Hello, TaxCloud is in the process of creating an integration with storefront. This will be provided for free to merchants. I will provide and update when this is available. Feel free to contact me if you have any questions. Thanks.

http://taxcloud.net

Interesting thread and thanks for the information. We work with many online retailers and this pending legislation is going to have some major impacts. It's nice to know that TaxCloud can help calculate those tax rates for each state. We'll monitor this thread and provide updates to any of our retailers who have questions on this.

We have been keeping tabs on this and the potential impacts on retailers on our blog: The Marketplace Fairness Act and Online Retailers

Please visit http://emainstreet.org/ it has grown in 3 weeks to have over 300 members.

The group is set up to educate the Congress and the public regarding the impact of the Marketplace Fairness Act on small businesses.

Several of us will be going to Washington DC to meet with some of the Judiciary Committe members to talk about our concerns.

Here is a recent article from one of the founding members:

http://dailycaller.com/2013/06/04/th...ll-businesses/

You can also ask to join the emainstreet.org group on Facebook:

https://www.facebook.com/groups/fairsalestax/?fref=ts

Thomas L. Carlson, VP
Assisted Living Store, Inc.

The first 2 articles in my blog address issues I have with the pending legislation: http://thomascarlson.org/

Thanks for the information on your group. We may write about this in an upcoming article on our blog.

I am asking for help on getting an article I wrote on the unfairness of the Internet Sales Tax circulated online?

Minnesota is a prime example of a state that asks for fairness but is not fair.

http://thomascarlson.org/2013/06/18/...ota-lawmakers/

I am not doing this for my personal profit this is a request to help spread the word. Please reblog, tweet and everything else you can do.

Lets keep the Internet Sales Tax Free.

Tom Carlson

Thanks for posting this article about Minnesota's situation. I'll see if our content team would like to include this on an upcoming blog post since we have been covering the latest updates on the Marketplace Fairness Act.