Aiken County small business owners Beau and Cori O’Steen are taking their concerns about the proposed Internet sales tax straight to Washington, D.C.
This week, the O’Steens will be on Capitol Hill to speak directly with legislators about the Marketplace Fairness Act pending in Congress and other issues that concern them, such as eliminating global trading barriers for small- and medium-sized businesses so they can expand their customer base.
The O’Steens run UPakNShip, an online company that sells shipping supplies and custom packaging primarily to eBay sellers across the country.
In 2003, Cori O’Steen started the business in San Bernardino County, Calif. The couple, after marrying a few years later, added an Aiken County distribution warehouse in 2011 that employs eight people. A total of 17 people work for the company.
UPakNShip is one of nearly 50 groups using eBay services that will speak with lawmakers and advocate on behalf of small e-commerce business. On Wednesday, the O’Steens have a face-to-face meeting with U.S. Sen. Tim Scott, who represents South Carolina constituents.
Cori O’Steen is most worried about the Marketplace Fairness Act, which passed in the Senate last May and would mandate online retailers collect state sales tax at the point a purchase is made. The bill also requires that states simplify their sales tax laws.
“The cost of implementation and reporting is estimated to exceed our profit, of which we re-invest into inventory,” she said. “In a
best case scenario, my fear is if the Marketplace Fairness Act is implemented, we cannot continue to expand our product line. In the worst case scenario, we do not have enough profit to continue to operate our business.”
Defendants of the proposed legislation say it would generate money for states and reinvigorate an out-of-date law that only allows state governments to collect sales taxes if a retailer has a physical location in that state.
President Obama supports the Internet sales tax proposal, but it faces opposition from Republicans in the House.
EBay takes offense to the bill’s definition of a small business as an operation that produces no more than $1 million in annual nationwide revenue. EBay said that amount is much less than other federal standards for defining a small business.
“EBay Inc. supports polices that ensure small business using the Internet can grow in today’s competitive retail market,” said Richard Nash, who heads eBay’s government relations division. “That’s why we have concerns with certain Internet sales tax bills that would create new burdens for businesses operating online.”
The proposed law, O’Steen feared, would prove an entry barrier for small businesses. “I started from and with nothing and reinvested everything I earned,” she said. “I don’t think we will hear that from Internet entrepreneurs in the future, should this law take effect.”