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Archive | October, 2019

Sales tax, the national solution

We recently learned about a bill by Senators Wyden, Shaheen, Hassan, and Merkley, that would mitigate the online sales tax issue, for a while.  Senate bill S2350 proposes:

Online Sales Simplicity and Small Business Relief Act of 2019 This bill prohibits states from imposing a sales tax collection duty on a remote seller for any sale that occurred prior to June 21, 2018. A “remote seller” is a person without a physical presence in a state who makes a sale in the state. A state may impose a sales tax collection duty on a remote seller only for a sale that occurs after January 1, 2021. In the case of a small business remote seller (no more than $10 million in gross annual receipts in the United States), a state may not impose a sales tax collection duty on any person other than the purchaser if the sale is made (1) on or after June 21, 2018; and (2) before the date that is 30 days after the states develop and Congress approves an interstate compact, applicable to the state and sale, governing the imposition of tax collection duties on remote sellers.

I’m guessing the expiration is just to make it easier to swallow now, so some longer-term debate about the proper way to solve the online sales tax issue for small businesses can happen while small businesses have some protection from abuse by the states.

Introduced in early August, so far this bill has only been “read twice and referred to the Committee on Finance. (on 7/31/2019).”

We can only hope this bill is given some serious consideration.  A moratorium, even a short one, is welcomed at this point.

In the long term, I think some reasonably revenue cap is a good solution to protecting small businesses from significant compliance costs.  Even with a much higher state sales revenue threshold, requiring sellers to monitor sales into every state, and then, on a dime, start collecting sales tax to customers in that state, has serious issues.  From where we sit, the $10 million revenue threshold looks pretty safe, but other businesses may still cry foul.

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Strange replacement handles

It doesn’t happen all that often, but sometimes the spot welds where the “wings” of the metal handle spline connect to the pot do fail, and the entire handle falls off.  Given these two auctions I found on eBay, I guessed that is what happened.

However, looking at the close-ups of the ends of the metal splines, these don’t appear to have every been welded onto a pot.  And the Bakelite part of the handles appears brand new.

It’s interesting that there is an extra bulge right where I presume the spot welds would be placed, perhaps as sacrificial material given that the welding process likely vaporizes some of the stainless steel.

I have no idea what the provenance of these replacement parts is, but they are likely not that useful as a full spline + handle replacement.  As our tests have shown, it is pretty hard to weld the handles back on with traditional arc welding equipment, as it wants to burn a hole through the relatively thin pot / pan walls, and brazing the handles back on isn’t an entirely aesthetically pleasing solution.

It is likely that they had a special spot-welding system in the factory for this, that you don’t typically find in a weld or machine shop.

My guess is that these were brought home by someone that worked in the relatively nearby Rome NY Revere Ware factory.

It’s close enough that this seems plausible.

 

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Sales tax – eBay will now collects taxes

eBay is the latest selling platform to automatically collect taxes based on the buyers location, and handle filing of returns and submitting payment to the proper tax authorities.  Here is what we received from them today:

While this doesn’t effect us directly (we don’t currently sell on eBay, but many of our parts are sold there by others), we consider it good news that the momentum towards good solutions to the potential for a sales tax apocalypse for small sellers continues to grow.

The biggest worry is still, what happens for sales on our own website.  Simply having to prove that we don’t have to file a sales tax return for even a small percentage of the 10,000+ jurisdictions in the US would make our small business unsustainable.  If any states decide to start bullying small businesses and send out sales tax compliance notices, the onus would then be on us to prove we didn’t have to file a return.

A similar thing happened to us once with our business license.  We had a business license in one town, and our PO box in the neighboring city.  The neighboring city send us a letter demanding that we obtain a business license in their city because we were doing business there.  For those unschooled in the typical rules around business licenses, simply receiving mail in a location is not a such qualifying business activity.  It took two successive responses to get them to give up.  I’ve also seen this for another business, where the state of California demanded the business register in the state and pay the LLC tax, simply because the headquarters of the brokerage company (TD Ameritrade) happened to have a California address.

The general concept is called regulatory overreach, and many states, especially California are not shy about doing it.

So we continue to wait and hope that a well crafted and thorough solution comes along that will reduce the fear of a huge tax compliance burden for independent sales that don’t go through a third party marketplace.  Otherwise, there will only be third party marketplaces left to rule the roost.

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