The internet has diversified the conventional way of doing business. Many companies can now run without having a physical or geographical presence due to technological advancement. The government has attempted to enact legislation on online sales tax to raise extra revenue. Taxation is undeniably important in the functioning of every nation. However, the decision has negatively impacted e-commerce startups in different states. Hence, I am afraid I have to disagree with the supreme court decision to overturn Quill v. North Dakota and argue that startups should be exempted from paying tax even if they exceed transaction levels until they have a competitive advantage.
Small businesses face tax burdens, making it hard for them to establish and compete aggressively with well-established online companies. Exposing big corporations such as Amazon to internet sales tax does not affect their operations because they have a competitive advantage. According to Berengian (2018), e-commerce startups often face difficulties, including oligarchy competition and high risks of making losses. While trying to fit into the market, taxing these businesses is unfair because they need more time to adapt to the conditions.
The legislation also puts more burden on startups to determine how to levy taxes on their commodities in various jurisdictions. For instance, if internet sales surpass a certain threshold or number of transactions, the business must collect miscellaneous taxes in different states. When making online purchases, companies must now recognize both their online and physical presence. The decision would directly impact small firms because it necessitates the allocation of additional capital. The added input leads to an increase in products’ prices, making it hard for e-commerce startups to compete with other large-scale retailers and wholesalers. I believe that the decision is responsible for creating the big corporations’ status quo while undermining small enterprises.
Reference
Berengian, A. (2018). Why the Supreme Court’s internet sales tax decision will hurt e-commerce startups. Forbes. Web.