People who are sick and tired of the brick and mortar system, usually don’t give up and try themselves in fields like eCommerce. This is something we all knew, and we all have gone through since eCommerce is getting more popular, while physical stores lose their power and reputation.
We all think that shifting our business to the eCommerce mode will make our lives easier, and that’s partly true! Our services become more available and what’s more important, more visible. But there’s something hidden behind this heaven – taxation!
Yes, entering the eCommerce world doesn’t exempt you from paying taxes, and that’s what you should consider before making a decision. Almost everyone forgets that this is a world where money has control over people, not the opposite! This is why even the almighty eCommerce can’t help you with taxes!
P.S. when eCommerce can’t help with taxes, services like ours are born! If you have tax-related issues, need consultation or want to exempt your business from sales tax, contact our company!
Cons of eCommerce Taxation
It’s obvious that being taxed is no picnic for both eCommerce and brick and mortar stores. In any case, taxes still exist and you should know about them right off the bat, not after you already have a business.
The most common type of tax that you can encounter while operating an eCommerce business is sales tax. Sales tax is otherwise called consumption tax, which is charged when a product or a service is purchased. Sales tax is charged to the end consumer, which means that if a product or service travels from A to B, person B will be charged the sales tax for the purchased goods and services.
You may think what’s so bad about that, it’s just a tax that is similar to others. So, what’s so terrible about sales taxes that we you don’t know? Well, first of all, sales tax is also a tax (obviously!)! But if we talk more seriously, sales taxes have lots of disadvantages, especially for business owners.
Sales Tax Rates Are Relatively High
Even though there are states with low or zero sales tax, in general, this type of tax costs business owners more than they expect! For example, California, with the highest Sales tax rate at 7.25 percent, Indiana, imposing sales tax at a rate of 7.00%, Mississippi with its 7.00% and so forth!
Products are Getting Higher at Cost!
Sales tax always makes the price of a product relatively higher. This, of course, sounds obvious; however, when you look closer, you will understand what’s so evil about it! For example, if you want to buy a brand-new computer desk with shelves for your office that costs $100 and live in a place where the sales tax rate is 7%, you will have to pay $93 more! So, instead of paying $100, you will double-pay!
Sales Tax is Devastating
What’s more, sales tax is considered to be one of the most devastating taxes of this system! Why? Because especially for the manufacturers, costs are relatively high, while the profits are not encouraging at all!
Pros Of eCommerce Taxation
Again, there’s nothing positive about taxes, especially when we’re talking about business owners. However, when we look at it from other perspective, you will see that even sales tax can be good! For this, take a look at the initial idea of imposing sales tax, and what it’s used for.
In general, the revenue coming from sales taxes helps state, country and local municipalities develop their communities. As you can see, the idea is quite noble…for communities only! More specifically, the portion of sales tax is used on public services like schools, libraries, special purpose projects and so forth!
If you are tired of taxes and are looking for a good solution, congrats! You found a good way to forget about taxes! Here at Prestige Auditors, we offer you a great opportunity to become tax exempt and not to overpay for things you could easily avoid. If you have questions concerning Amazon FBA sales tax, Walmart sales tax exemption and other tax-related topics, feel free to contact us!
Remember, the money that you spend on sales tax could have been invested in something that truly matters! If you want your expenses to matter, get tax exempt now!