Jason Smith, owner of Tiki Pug Music, is concerned that a new law could put him out of business.
Smith primarily sells his wares — miscellaneous items including T-shirts, CDs and lingerie — on eBay and Amazon. He started selling online 17 years ago, “back when eBay was so small I actually looked at everything that was being sold online.”
For years, Smith made extra money that way off and on. Eventually, he quit his “real job” at a Las Vegas hot tub store where he delivered tubs to customers, pursuing his online entrepreneurship instead.
Now, he operates two online stores via eBay and Amazon and runs his recently opened storefront at the Sin City Antique Mall.
Smith, with a business partner, also runs Thrifting with the Boys, a Facebook group that teaches people to shop in thrift stores and make money selling their finds online. The group has about 4,000 followers, including a contingent of retirees. Because of its success, eBay has hired the duo to speak at conferences; and Smith occasionally writes how-to articles for websites.
On any given day, he has 1,100 items listed on eBay and 700 CDs for sale on Amazon. Smith sells between 200 and 400 items each month from his upstairs bedroom, where he works in his gym shorts.
“It’s definitely an at-home business,” Smith said.
The Marketplace Fairness Act, if enacted into law, could prevent him from growing his business, contributing to his local economy and competing with large retailers, he said.
The proposed legislation grants states the authority to compel online and catalog retailers, no matter their location, to collect sales tax at the time of a transaction. The act passed the Senate earlier this year and goes before the House this session.
“It would be really crushing,” Smith said.
He said retirees who supplement their income selling online will be completely wiped out if the Internet sales tax bill goes through.
“It’s a daunting task to all of a sudden have to pay attention to almost 10,000 taxing jurisdictions,” he said.
The United States has 9,600 sales tax jurisdictions, because cities and counties also impose sales taxes.
Smith’s Tiki Pug Music, too, may cease to exist if the law’s enacted. “It would eat into my bottom line so much, who knows if I would survive,” he said.
Not everyone shares Smith’s view.
Brian Harge is president and CFO of Sports Entertainment Gear, a local company that sells light-up game-day shirts online. He also is general manager of Passion Parties International, through which he has dealt with collecting sales taxes in most jurisdictions.
“It is a very complicated and tedious system to navigate. The Marketplace Fairness Act is much-needed legislation to ensure that all businesses are operating on the same playing field in regards to collecting sales and use taxes,” Harge said.
As for the new law affecting his startup, Sports Entertainment Gear, Harge said the company has had the legislation on its radar, and doesn’t think it will have a huge effect on business.
The International Council of Shopping Centers is among those lobbying for the legislation to pass, as it represents the $2.4 trillion shopping center industry. In 2012, shopping center sales accounted for $137.6 billion in sales tax.
After the legislation passed the Senate, the International Council of Shopping Centers released this statement through its president and CEO, Michael Kercheval: “We applaud this common sense development; the Senate’s vote marks a big step forward for landlords and retailers, and for fairness in general. Now ICSC will turn our attention to the House of Representatives to ensure that all retailers, online and physical, are operating by the same rules.”
Centers and shops are not the only ones who stand to benefit should the bill become law, according to the International Council of Shopping Centers. States could gain some $24 billion that currently goes uncollected, according to some estimates.
Devin Wenig, president of eBay Marketplaces, has said it’s inevitable that an online sales tax bill will eventually become law, but that it won’t stop his company from fighting to make it fair for small businesses.
EBay, for example, is fighting for as big a sales tax exemption as possible. The company also operates a microsite, eBaymainstreet.com, set up to assist and inform small businesses about what’s going on.
However, Amazon favors the legislation and has said it levels the playing field for all sellers while addressing the states’ needs without federal spending.
“I think people who are in support of it are just dazzled by the dollar signs. They’re not thinking about the small seller online,” Smith said.
Contact reporter Laura Carroll at firstname.lastname@example.org or 702-380-4588. Follow @lscvegas on Twitter.