As part of our ongoing efforts to keep you updated on how saying the phrase “just charge it!” is changing for your very customers, we wanted to alert you to the Marketplace Fairness Act of 2013. It specifies that states need to simplify their own tax systems, so they can collect sales tax from out-of-state merchants, who are selling to their citizens online.
The act has bipartisan support — a rarity in the vituperative atmosphere of Washington — so would seem to have good odds of passing. How you view the act probably depends on the kind of “vending” you do: If you’re a brick-and-mortar seller yourself, then you’ll be glad to see this particular playing field leveled. If you’re online only, you’ll be ticked — many of your customers will experience an automatic price rise on everything you sell.
On the other hand, lots of merchants do both, and do quite well. And one could argue, in a macro-sense, that if the act passes, and cash-strapped states are able to use some of that money for long-neglected infrastructure projects, expanded school programs, etc., then perhaps the injection of cash in so many local economies… would create more customers!
But that is a long view indeed. In the shorter term, if and when the act passes, then online buying will just be perceived as subject to the same inflationary pressures already hitting food and gas: Prices are going up.
If your business is primarily online, and you’re not happy about the prospect of being in the tax collection business — or unhappy that your customers will experience a slight case of “sticker shock” — consider that having even a modest “sale” of 5 – 10% or so (especially around “tax season,” like now!), helps return your prices to their pre-sales tax average.
You can also re-examine shipping rates, where possible (though not with the expectation that the Post Office will keep delivering on Saturdays!), or generally look at what incentives you might offer online customers, even if occasionally, to keep them ordering from you.
If you sell both and offline, examine whether it’s worthwhile to offer “online only” selections and “perqs” (and, perhaps, vice-versa!), depending which of these customer bases you want to grow. And of course, your AVPS rep is ready to talk about any other options that might help, whether you need to expand your M-commerce presence, provide On-the-Spot Processing, or anything else!