Small Business Owners: Influence Congress to Take Action on Sales Tax Fairness

On June 15th, Congressmen Jason Chaffetz (R-UT) and Steve Womack (R-AR) introduced The Remote Transactions Parity Act. This bill is critical to closing the online sales tax loophole and creating a level playing field for local retailers.  We are thrilled with the leadership they have shown on this issue in the House of Representatives. But, will we see this bill passed? Many Americans understandably have an extremely cynical view of Congress and its ability to get things done. In fact, according to a recent Rasmussen poll, 66% of constituents believe that their elected officials in Congress don’t care what they think.

As a small business owner, you may be one of these Americans. However, as one of the top groups perceived to be giving back to their communities while also achieving the American Dream, small business owners are primed to cultivate relationships with their elected officials and become one of the most influential voices – particularly on sales tax fairness issues.

Are you still unsure that this opportunity exists? In a 2013 study conducted by the Congressional Management Foundation and Society for Human Resources, 95% of U.S. House Representatives said that “staying in touch with constituents” was the most critical component of their job satisfaction and effectiveness. Additionally, the report found that Representatives spend less than 20% of their time on political and campaign work. Still not convinced? In another Congressional Management Foundation study, Congressional staff said that constituents who make the effort to personally communicate with elected officials who are undecided on an issue are more influential than lobbyists or news editors.

So what does this mean? This means that your elected officials are open and willing to hear from you about your position on sales tax fairness and your vital role in the community, if you make the effort. Members of Congress need to hear directly from small business owners about the importance of efairness to job growth, how small retailers strengthen our communities, and the positive impact you make on your local economy. Here are some simple ways you can get involved:

  • Email your member of Congress
  • Tweet your members of Congress
  • Call your members of Congress


After you’ve taken action by emailing, tweeting and/or calling your member of Congress, you can continue to show your support for efairness by submitting an opinion editorial or letter to the editor to your local newspaper.  Here are some samples that you can customize:


When it comes to government, you can either play in the game or sit on the bench. Either way, Congress will make decisions that impact your business. Don’t let cynicism silence your voice.  Let Congress know that it’s time to support local businesses like yours and pass sales tax fairness legislation.

Online Sales Tax Loophole Presents Unique Challenges for Longtime Family Businesses

Mark WilliamsMy family first opened the doors to Williams Ski & Patio in 1875. We were a pioneer in specialty retail and one of the first ski shops in Chicagoland. Over the past 140 years, six generations of Williams’ have owned and operated the business. Throughout the evolution of our store, we have continually adapted to new products, trends and technologies to maintain relevance and a strong customer base.

T. Williams founded our family business in downtown Chicago in 1875 selling awnings, buggy tops, tents and canvas furniture. Just as the company was celebrating its platinum jubilee (1949) with our 4th generation of Williams’, the business moved to Oak Park, IL and expanded to include outdoor patio furniture. This expansion was the turning point for Williams Ski & Patio, allowing us to become an early pioneer in specialty retail. Nearly 14 years later we expanded again to include a specialty ski shop – one of the first ski shops in Chicagoland.

Over the years we have moved locations, remodeled, added show rooms, opened a warehouse, and re-designed our business model to keep demand high and risk low. From spring to summer we sell outdoor patio furniture and accessories, and from fall to winter we cater to ski equipment and accessories. Because of this adaption of our business to meet the needs of customers seasonally, today we are Chicagoland’s largest ski and outdoor patio furniture store and employee 20-25 people.

Unfortunately, the online tax loophole has created significant challenges for my business.  Although we give customers plenty of reasons why they should buy from us – from our knowledgeable staff to customer service to the vast selection of quality products – potential customers often explain that they would rather buy products online in order to beat the government out of taxes. While most people do understand that they are responsible for paying sales tax for online purchases, they know that there will likely be no consequences if they do not follow through and pay the tax.

I take pride in the fact that Williams Ski & Patio is still family owned and operated, especially considering the devastating impact of the online tax loophole on many family businesses.  Competition in our business is natural and expected, but unfair competition is not. The online sales tax loophole encourages people to cheat on their taxes, making it very difficult for brick-and-mortar shops like mine to stay competitive in the market. While we always strive to offer our customers the best products at the best possible prices, we are required to collect state sales tax. As a result, I have seen many other longtime family businesses forced to shut their doors in recent years as customers increasingly opt to buy products online where they can avoid paying sales tax.

I believe that we should all have to play by the same set of rules. Businesses that are community fixtures –providing services and jobs – shouldn’t lose out on a sale simply because the government makes us collect sales tax but does not enforce this policy with our online-only competition. I support e-fairness as a way to level the playing field that will allow my family business to keep doing what we do best – providing the best possible products for customers’ outdoor needs. My business has a rich family history, and a fair sales tax policy will help to ensure we have a fair chance to thrive for future Williams’ generations.

Mark Williams is the owner of Williams Ski & Patio in Highland Park, IL.

Complaints About Collecting Sales Tax Are Red Herrings

Simms Fishing in Bozeman, Montana provides fishing products to 550 specialty fly fishing stores throughout the United States as well as larger chain retailers, such as Cabela’s and Bass Pro Shop. Simms Fishing strongly supports efairness because they believe it’s important to the future of their industry. Fly fishing stores provide free lessons, product education and other services to the communities where they are located. If these store go away, so do these services.  When Simms Fishing began selling directly to consumers via their website, the company decided that they wanted it to be on a level playing field with their retailers. Even though Montana doesn’t have sales tax, it was important to them to collect in the states that do. Simms Fishing found that there are several good third party services that make collecting and remitting sales tax from online purchases painless.  The following video features Simms Fishing president, K.C. Walsh, discussing the importance of efairness and the software that makes it possible.

This Tax Season, Don’t Forget Your Use Tax!

jodyheadAs April 15th quickly approaches, Americans are gathering their receipts and paperwork; breaking out the calculator and doing their taxes. For some that means going to visit their accountant, for others downloading the latest tax software or for the traditionalists – filling out their tax forms with pencil and paper.

However you choose to take care of your tax task, there is one item on most state income tax forms that you shouldn’t ignore. In my home state of Illinois it’s Step 8, Line 23 on the personal income tax form: “use tax on internet, mail order, or other out-of-state purchases.” This is where taxpayers need to calculate the amount they owe in state and local sales taxes on the online purchases they made in the previous year.

Many shoppers think they’re getting a better deal when they shop online. Most online retailers are not required to calculate or remit sales and use taxes. This means that their prices are anywhere from 4 – 10% lower than brick and mortar retailers selling the same goods. But the reality is that just because online retailers aren’t required to collect this tax doesn’t mean that consumers aren’t required to pay it. Failure to do so can lead to audits, fines and penalties. That’s why it’s so important to calculate how much you owe for online purchases and not leave that line blank.

With so many states strapped for cash, they’re looking for any opportunity to collect the revenue necessary to operate. Illinois even addresses it on their Frequently Asked Questions page and succinctly highlights why it is so important to pay this tax:

“If you use goods in Illinois that were purchased tax free or at lower rates outside Illinois, you owe use tax to the department. If you do not pay, it is unfair to Illinois retailers, consumers, and taxpayers in the following ways:

  • Illinois retailers, who must charge sales tax, are put at a competitive disadvantage as compared to out-of-state retailers, who charge no sales tax, or charge tax at rates less than Illinois rates.
  • Illinois must make up these lost revenues or curtail state services provided to consumers and taxpayers.”


If you go to an accountant, use an electronic tax filing system, or carefully read the tax form instructions there are algorithms that can roughly estimate your state sales tax liability based on your income and online shopping habits. However, if you want to accurately calculate your use tax, there are the steps you can follow. I’m using Chicago, Illinois as my example, but tax rates and laws in your city, county and state will be different.

1. Determine how much you spent online and out of state.

  • For this exercise let’s say that you bought online a $50 pair of running shoes, a $150 digital camera and spent $10 on specialty coffee beans
  • Illinois state law requires you to additionally account for any purchases you bought out of state. For example, if you bought a necklace while on vacation in Atlanta, you paid the 4 percent Georgia sales tax on jewelry. However, by bringing the items back home to Illinois, you owe the 2.25 percent difference in use tax as well.
  • Gather your receipts and tally up your purchases, pay attention because there are some online retailers that do collect sales tax – you shouldn’t include these purchases in your calculations since you’ve already paid


2. Determine your state sales tax

  • In Illinois this is 6.25 percent
  • If you live in another state, you can use software like Avalara or TaxCloud to look up your local use tax rates


3. Determine any specialty taxes

  • In Illinois, there is an additional 1 percent tax on qualified food, non-prescription drugs and medical appliances that would apply to the specialty coffee beans


4. Calculate what you owe

  • For the general purchases, you owe $13.13
  • For the specialty coffee beans, you owe $1.23
  • You would fill in $14.36 on your tax form for your online purchases


It doesn’t have to be this hard. If Congress would pass eFairness legislation online retailers would simply collect and remit sales and use taxes for you at the time of purchase. Brick and mortar retailers do this on every purchase already and there are several companies that offer online retailers the ability to fully automate tax collection and remittance, so we know it isn’t too complicated to do. Additionally, this streamlined process would ensure that cities and states governments get the funds they need to operate.

Jody L. Padar, CPA, MST, is the CEO and Principal at New Vision CPA Group and author of The Radical CPA at

It’s Been a Long Ride for EFairness

bigpoppiSix years ago, we opened Big Poppi Bikes to serve the needs of the cycling community of Manhattan, Kansas. Our store offers everything from kids’ bikes with training wheels and handlebar streamers to BMX stunt bikes to commuter bikes to high end racing machines. But what really sets us apart is our unbelievable service team. From helping you choose the right bike, to making repairs and keeping you safe on the road, our deep knowledge and expertise is why our customers come back time and time again. This kind of service and expert advice is something that you get from a local small business that is unavailable from an online seller.

A new bicycle is a big purchase – costing from a few hundred dollars to a few thousand dollars. We price our bikes competitively and understand that our customers want to save money where they can and are shopping on both quality and price. We like to think that Big Poppi’s knowledgeable staff and expert technicians add extra value to their shopping experience. We are passionate about bicycles and we love helping people pick the right ride, but nothing is more frustrating than when someone showrooms at our store. There have been countless times when customers have visited our store, asked questions about the best bikes for commuting or competitive riding, get fitted for the bike of choice and then walked away to purchase online from an out-of-state remote seller so they can save 8.4% on sales tax. It’s incredibly disappointing to see the very same customers who looked to our knowledge and expertise buy a bicycle online and then come back into the store for repairs and tune ups.

Showrooming ultimately doesn’t just threaten our bottom line, it can impact our community too. Brick-and-mortar stores like ours play an important role in our society and economy. When was the last time your online retailer hosted group bike rides in your community or provided mechanical support during a local race? Traditional retailers add nearly four jobs for every million dollars of increased sales. Online retailers add just one. When local businesses thrive, the community thrives. Big Poppi has made a point of giving back to our community through our “Give Back” program that allows customers to donate 5% of their purchases in the past 12 months to worthy causes.

By shopping locally you are investing back in your community. You’re helping us provide good-paying jobs and are supporting a business that is working to make Manhattan a better and more vibrant place to live. Additionally, your sales tax dollars are a critical source of revenue for the city of Manhattan. Those dollars fund everything from roads, to schools, to police and fire departments. Good infrastructure, good schools and safe neighborhoods raise property values. It’s a win-win all around.

Right now we need Congress to move forward with the legislation that would require online sellers to remit sales taxes back to the appropriate jurisdictions. According to a recent national survey, 70 percent of Americans support federal legislation that would require online-only sellers to collect sales tax at the time of purchase. But Congress is dragging their feet as they have for nearly 20 years. The time has come for to invest in our future and ensure continued economic growth by enacting efairness legislation in 2015.

Big Poppi Bicycle Company is located in Manhattan, KS where they work to build their town into a community of people, including non-cyclists, that makes other towns jealous.

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