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What taxation of online sales means for small businesses

By on June 22, 2018 in RevereWareParts.com, Small business

Online retailers come in many varieties.

– Some sell a variety of products, and some. like ours, have a very specialized niche.
– Some online retailers have employees, and some are owner operated.
– Some are a business and some are more of a hobby.
– Some are a full time job for the business owner, and some are a side job. Some, provide no income at all.
– Some, provide products you can’t find anywhere else.

Typical small business

I got my start in this business based on a need.  We were looking for replacement handles for some old Revere Ware and couldn’t find any.  Based on our need, the fact that the company that made Revere Ware, stopped selling replacement parts three decades before we came on the scene, and the large number of Revere Ware pieces that had been sold, I presumed that there was a good opportunity.

So I went through the trouble to get replacement parts manufactured, set up a website with lots of useful information and quite a few replacement parts for sale, and have served the community of Revere Ware cookware owners for almost a decade now.  Our story is probably not that uncommon among the small businesses that sell online exclusively.  This guy makes really cool devices that are useful for getting the most out of vintage Apple computers.  Like us, he serves a small community of customers and potential customers, and his products are incredibly useful for that that need it.

Supreme pain in the *!@#$%

Among this backdrop, consider the Supreme Court ruling that came out this week, which opens the door for South Dakota to require people selling into South Dakota, but who aren’t located in South Dakota, to collect sales tax on the state’s behalf.

Our average order total is between $10 and $20.  We fulfill thousands of orders each year (not hundreds, not tens of thousands).  Right now, we are required to collect sales tax only in our home state, home county, and home city.

Despite the fact that we are more than 20 years into online retailing, quite frankly, the software we use to run our website, is horrible when it comes to extracting data.  Every year, in order to collect the data the California requires us to report about our sales, we spend quite a bit of time slicing and dicing the sales data to figure out exactly how much sales tax we collected, much less all the other data California wants, like breakdown of sales inside and outside the state, county, city.

Even if better eCommerce software was available, switching is expensive.  The last time we updated our website and move to a new platform, it cost us about $10,000.

We deal only with 3 tax jurisdictions.  In the US there are over 12,000 state and local tax jurisdictions.  It isn’t too hard to imaging how requiring online retailers to collect sales tax could become a nightmare that puts retailers like us out of business.  Among the myriad of problems:

– We only have to keep up with three rates right now – one state, one county, and one city.  Requiring us to keep track of and set up to collect 12,000 different tax rates would be simply impossible.  Even 50 or 100 would be substantially more work.
– We only have to file one sales tax return right now, which only includes one state, one county, and one city tax and revenue breakdown.  How in the heck would we file when considering 12,000 jurisdictions?

South Dakota has an exclusion for any business with less than $100,000 or 200 individual sales in the state.  But, for us just to be able to figure out for 50 states whether we are above or below the limit or revenue and transactions will require a lot of work.  And given that we make quite a few sales of small amounts, we will undoubtedly be above such limits in some states.  There will definitely be a crossover point where we just throw up our hands and say “it isn’t worth it anymore.”

A better solution

In my opinion, there needs to be a solution at a Federal level to solve this problem.  This is what I would want:

1. A flat sales tax for online sales that applies to every business every where.
2. A single authority that collects and distribute sales tax revenue to the states, counties, cities.

This presumes a couple of things:

– That 50 states and / or more than 12,000 tax jurisdictions can agree how to apportion tax revenue among themselves.
– That states with higher sales tax than the agreed upon common flat sales tax rate, will agree to accept a lower rate for online sales

Which is basically saying it probably won’t happen  But what if it did?  It would sure make my life easier, and it would remove the barrier for a lot more small businesses to open up.  Every single bit of bureaucratic filings and fees makes it that much harder for a small business to form and stay in business.   Perhaps you haven’t heard, but small business formation is down to about 2/3 of historical norms.  It isn’t hard to imagine that bureaucracy has a lot to do with this.

Government entities are sometimes greedy and unreasonable

Remember that, in addition to the requirements for collecting sales tax and filing returns, there is always the threat that any tax jurisdiction can file an action against a business demanding that they pay a presumed amount of sales tax, or prove that they don’t have to. Thing this is far fetched?  Let me tell you as story.

In California, and probably other states, businesses are required to pay business property tax on assets.  Imaging having to go through everything the business owns, assign it a reasonable value, and then pay property tax on that value, just as you would on real estate.

But there is an exclusion.  If you have less than a certain amount of assets, you don’t have to pay.  But you are _supposed_ to file a return anyways, proving that you don’t have to pay.  It is just another bit of red tape.  I now my business assets are below the threshold required to pay this business property tax, so I never bothered to file a return (who has the time).  So someone that works for the local assessor decided one day to just randomly assign a presumed value of assets that would guarantee I would owe business property tax, and send me a bill … to the wrong address, even though they had my proper mailing address.  Months go by and someone slips one of these letters from the assessor under my door, as they happen to recognize my business name.  Now they are charging me late penalties as well.  Two years later, after filing an appeal with the County Board of Supervisors, and winning, I am still having trouble getting the assessor to remove the assessment from their system.

Now multiply this experience by 12,000 tax jurisdictions and you’ve just killed every small business.

 

 

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What happened to the stamp?

By on May 30, 2018 in Tips

Reader Dana asks:

I have a sauce pot (not sure of size, but we use it for pasta), that looks exactly like the Revere Ware pieces I’ve picked up from antique stores, but is has no logo/stamp on the bottom. My question is, is it possible that any Revere Ware pieces were made without a stamp/logo on the bottom, or could it have been completely worn off with repeated use/cleaning?

She is talking about the classic Revere Ware stamp on the bottom of the pot.

This is not uncommon.  The older Revere Ware has quite a thick copper layer as depicted in the Revere Ware photo guide.

We’ve seen on a number of occasions where the stamp has partially or completely been worn away from use, but the copper layer appears entirely intact.

With newer (post 1968) cookware, this is typically not the case.  Especially in cookware from the 90’s forward, the copper layer seems to be for appearance only, so that it looks like the older stuff, but it is not thick enough to do any good.  We’ve seen the copper layer with bare spots, entirely worn off, and even in some cases where it has fallen off in one piece.

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Revere Ware deal of the week – a low start bid square skillet

By on May 20, 2018 in Ebay

Square skillets are almost always listed for $100 or more on eBay, as either a starting bid price or a buy-it-now price.  But there is little indication of whether they are actually selling at that price.  Here is one that should be interesting, an auction for the 11″ (larger size) square skillet starting at just $9.99.

If you are looking for a square skillet, this is a great one to bid one.  It will be interesting to see what it ultimately sells for.

Update

Here is another square skillet starting at a very low bit (although this one has no lid).

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Vintage cast iron pans

By on May 18, 2018 in Care, History, Uncategorized

As far as I’ve always been concerned, cast iron is all about the seasoning.  You can take just about any cheap abused cast iron pan, clean and season it well, and it will perform like a champ.

In fact, that is exactly what we’ve done personally, purchase some basic cast iron pans at thrift stores, and clean and season them.

But, I am also a huge fan of history.  So while I don’t think a vintage cast iron pan would necessarily perform better (feel free to make an argument against this presumption), The idea  of owning an using a cast iron pan that has been around for 100 years, is interesting.

Along those lines, here is a video on how to identify vintage cast iron cookware.

Now, the video raises an interesting point about older models having a smooth finish, vs newer models having a rougher finish, which made me wonder, which is better.

Here is an article which discusses the difference, although has a much more complex explanation of why newer pans are rough and older ones are smooth.

The entire concept of seasoning cast iron, which acts as a leveling agent so the proteins won’t adhere to the pan, was a result of home cooks trying to fill in this new, rougher surface. The roughness that you feel on much modern cast iron is sand, which used to be removed during the cast iron production process. However, that step has since been removed by many modern manufacturers. “A lot of cast iron today is produced in 90 minutes,” says Powell. “But at the turn of the 20th century, cast iron would sit in molds for upwards of 48 hours before then being tumbled for 24 hours before it then received its final packaging.” As a result of this, vintage cast iron was incredibly smooth.

Ah, so it turns out that not all cast iron pans are equal, and older ones with a smooth finish are much easier to maintain, don’t require the same level of seasoning, and generally work better.

I’m off to the thrift store to try and find a vintage cast iron pan.

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Revere Ware Tri-Ply cookware

By on May 2, 2018 in History, Tips

Revere Ware is most well known for its copper bottom cookware.  An often overlooked variety is the aluminum core Tri-Ply cookware, which has an aluminum disk on the bottom of the piece sandwiched between an inner and outer stainless steel shell.  An aluminum core is what most high-end cookware uses today to spread the heat out evenly.

The bottoms of these Tri-Ply pieces can be identified by the protruding disc on the bottom.

Here what our photo guide has to say about Tri-Ply cookware:

Kitchen technology changed in the mid 1980’s with the introduction of the smooth glass/ceramic cooktop surfaces. These surfaces used embedded thermostats requiring cookware with thick, cast metal bottoms (as opposed to the pressed steel or electroplated bottoms used by Revere Ware). In March of 1986, Revere responded with the Aluminum Disc Bottom Cookware, sometimes called “tri-ply” or “slab bottom” (identified internally as the 2000 line). It continued the classic Revere Ware styling of the earlier 1400 and 7000 lines, but used a stainless steel coated aluminum disc brazed to the bottom of each piece allowing for use on smooth cooktops (and giving it the heat dispersion capability needed for use on conventional cooktops. Initially, the discs were brazed and buffed in Korea, and the final product assembled at Clinton. Later the entire production process was moved to Clinton. The line was an immediate success, amounting to 20% Revere’s total cookware sales in 1986.

The aluminum disk is actually quite think and pretty effective at spreading the heat.

Because of the construction, these pieces are suitable for glass top stoves, as they are much more likely than the copper bottom variety to remain flat.

There is some danger though.  We continue to receive more and more reports of the aluminum disk separating, dumping out molten aluminum.

At best, this can damage your cook-top, flooring, etc..  At worst, it cause injury.  It isn’t clear if these failures occur due to extreme overheating, or just normal cooking.  We’ve gotten enough reports that we can no longer recommend people use this line that has the disk.

There were other versions of Revere Ware deemed Tri-Ply as well, that contained a carbon steel core between two stainless steel layers.  They were made to look like the tradition Revere Ware pans, sans the copper bottom.  While the aluminum disk variety over these are likely better at spreading the heat, I wouldn’t consider them safe anymore.  So if you want the Tri-Ply line, use the one with the embedded core.  The carbon steel / embedded core variety will not have the round disc on the bottom.

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