Will Mom-and-Pop E-Commerce Shops be Economically Affected if Online Sales Tax Passes?

This argument is based on outdated technologies and ignores key developments that have occurred since the 1992 Supreme Court ruling, however. Technology is now much more advanced and accessible. Affordable software is available that can handle complex tax calculation and collection compliance tasks automatically, without slowing down transactions.

Opponents of closing the online sales tax collection loophole also complain that it's unfair to expect mom-and-pop e-commerce operations to deploy and maintain the sophisticated software necessary to comply. They say they lack the technical sophistication to manage this task. This ignores the fact that online businesses — even small ones — are technologically savvy.

After all, they're able to manage an online store, attract customers, complete online sales, collect complex shipping information, collect and process online credit card payments, and much more. The sales tax solutions available for these retailers require only a fraction of the know-how needed to perform these tasks. And depending on their size and transaction volume, small online retail shops can get a plug-and-play solution for under $30 a month.

While closing the online sales tax loophole would represent an additional expense for the vast majority of online operators, the cost would be nominal and implementation and ongoing maintenance burdens would be practically nonexistent. There are affordable options on the market now that automatically calculate, collect and file taxes. In fact, automating the process has been found to save merchants a significant amount by helping them avoid the fees and penalties they would have to pay if they forget to file returns.

The internet began to have a significant influence on culture in the mid-90s, but until 2001, its effect on commerce was much more limited. Websites served mainly as electronic marketing brochures until the infrastructure to support secure payments was developed. Since then, online retailers have enjoyed huge advantages over their brick-and-mortar counterparts, including low overhead and access to a global market of prospects.